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Dear John,
Please could you explain logic behind the following question. I do not understand it. I shall be very grateful.The accountant at Borris Co has prepared the following reconciliation between the balance on the trade payables ledger control account in the general ledger and the list of balances from the suppliers ledger:
Balance on general ledger control account
Credit balance omitted from list of balances from payables ledger
Undercasting of purchases day book Total of list of balances
$ 68,566
(127)
68,439 99
68,538
What balance should be reported on Borris Co’s statement of financial position for trade payables?
A $68,439
B $68,538
C $68,566
D $68,665If the purchase day book has been under-added then it means that the balance on the control account will be too small (because the totals are only used in the control accounts).
So the correct control account balance should be higher (by 99 if I understand your table correctly).If a credit balance has been omitted from the list of balances in the ledger, then the total of the list will be too small and so should be increased (by 127 if I understand your table correctly).
The free lecture on Books of Prime Entry will help you.
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