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Question from Course notes, chapter 16.
The total of the list of balances in Adele’s payables ledger was $438,900 at 30 June 2008. This balance did not agree with Adele’s payables ledger control account balance. The following errors were discovered:
(1) A contra entry of $980 was recorded in the payable ledger control account, but not in the payable ledger
(2) The total of the purchase returns journal was undercast by $1000
(3) An invoice for $4344 was posted to the supplier’s account as $4434
What amount should Adele report in its statement of financial position as accounts payable at 30 June 2008?
A $436,830
B $438,010
C $439,790
D $437,830Why the answer is D, not A?
D is 438900-980-90=437830. But why (2 – $1000) didn’t be deducted?
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because #2 only effects the control account.
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because no.2 is an error of addition in the day book, as the payables ledger is not the part of double entry, each return is recorded separately on the individual accounts but the gross summed up amount is posted to the control account, therefore it shows an understatement in the control account only but no change in personal accounts
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