- This topic has 3 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
Hello, Sir!
Could you please explain this question?
Q: A purchase ledger control account has been reconciled with the purchase ledger balances as shown.
Balance per control account $76000
Total of purchases journal for one month not posted to general ledger $4000
Cash paid to trade payables not posted to purchase ledger $5000
Total of balances in purchase ledger $ 85000Which figure for trade payables should be shown in the statement of financial position?
A $ 75 000
B $ 77 000
C $ 80 000
D $ 85 000It says the answer is C
I’m getting a little confused, please elaborate the answer for me.The control account is in the general/nominal ledger. A total of 4,000 has not been entered, so it should be credited to the control account giving a correct total of 80,000.
The purchase (or payables) ledger is not part of the double entry and shows the amount owing to each individual payable. Cash paid has not been entered, this reduces the amount owing and so the total of the balances should only be 80,000.
I suggest that you watch our free lectures on Books of Prime Entry where all of this is explained.
(Our free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.)
- You must be logged in to reply to this topic.