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Kindly help me with this question.
A list of balances extracted from a receivables ledger totaled 276429. On further investigation the following items were discovered.
1. A contra of 1420 with the payables ledger had been included in the control account but not the customer’s account.
2. The list includes credit balances totaling 7611 which had been deducted from the total.
3. Discounts allowed of 80 to a customer had been entered in the wrong side of his account.
What was the total of the receivables balances to be included in the statement of financial position ?
I don’t understand the second statement, kindly explain the statement .You would expect the balances in the receivables ledger to be debit balances.
It may be that there are some credit balances – maybe some customers have paid us too much, or maybe they have returned goods for which they had already paid.
In the statement of financial position, the total of the debit balances should be shown as receivables and the total of the credit balances should be included in payables.
To find the receivable balances to be included in statement of financial position, should I include the credit balance? The answer given is 282460.
As I wrote in my previous reply, in the statement of financial position the total of the debit balances should be shown as receivables and the total of the credit balances should be shown as payables.
Since the figure given in the question is the net figure after subtracting the credit balances, to get the total of the debit balances we need to add the 7611 to the total.
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