- This topic has 1 reply, 2 voices, and was last updated 8 years ago by
.
-
Posts
-
Hi.
It is given that the business is owned by Jean MacDonald. And in this practice question of control account reconciliation, additional information is given because the balances do not match. And it is said as :
“Amanda’s account in the purchase ledger had been debited with £116 for goods returned to Jean, but no other entries have been made. ”
As the owner is Jean, and if goods are being returned to her, then Amanda must be a customer, so it should be sales return. and double entry :
Dr: sales returns
Cr: bank/cash/receivables (am I wrong?)But in the answer sheet, the correction was noted as “Purchase return by Amanda” on the debit side of payables control account.
I did not understand why it is so because if it was purchase returns it should by Jean herself. Then who is Amanda?
From what i’ve read, i understand that neither Amanda nor Jean are owner. They both are suppliers of the company.
Now, when we return goods to supplier, the double entry made is:
Dr Payables Control Account
Cr Purchase ReturnsThe balances of individual suppliers accounts in the purchase ledger are also updated, but thats not the first priority. First priority is always the control account, because only Control Accounts are part of Double Entry, not memorandum accounts.
- You must be logged in to reply to this topic.