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Sir as you said undercasting/overcasting of cash payment/receipt book will trial balance to imbalance.
But if it is written:
A transposition error while posting the total of cash payment/cash receipt book into the general ledger
The answer says that trial balance will balance
Sir i am not able to understand this .It depends on whether or not they have a separate cash account in the general/nominal ledger.
Have you watched my lectures on books of prime entry?
Sir it is sensible to assume that since cash book has many segment(or many different entries)
So when we do error in totalling we should use suspense a/c
But when it is written that error is posted to GENERAL LEDGER it means double entry error( as general ledger means a double entry format) and hence no need of suspense a/c???I do not know what you mean by the cash book having many segments.
Double entries are made in the general/nominal ledger. Usually there is a cash account in the general ledger.
Again, have you actually watched my lectures on Books of Prime Entry?
Yes sir i have watched them
Many segments means like payable ,cash purchase, cash sales etc.
So when we do totalling error in cash book we post the wrong amount to the cash account
But since all individual entries( relating to cash ) to payable ledger control account, receivables ledger control account ,sales account, purchase account etc.. are done correctly there is an imbalance in trial balance
Right sir?!By the individual entries i mean the entries relating to totals of analytical columns
Hello. Please explain this…when it comes to income and expense accounts (statement of profit or loss accounts), is it the TRANSFER to profit or loss that goes in the trial balance or the actual amount paid/received during the year?
Thank you
The figures in the trial balance are the balances on the accounts before the year end adjustments and before the transfers to the SOPL.
Have you not watched my lectures showing the double entries, the preparation of the trial balance, and the year end adjustments?
Oh alright, so the trial balance would always show the actual amount of expense/income paid/received right, even after year end adjustments?
I’ll make sure to watch it, thanks. Can you pls provide the link to your video?
Not alright. As I wrote in my previous reply it shows the balance on the accounts before the year end adjustments.
You can find links to our lectures, notes and other free resources on the main Paper FA page: https://opentuition.com/acca/fa/
Ok. What do you mean by year end adjustments though? Do you mean adjustments for accruals and prepayments? Please clarify..
Thank you for the link
Again, I explain all of this in the lectures and you cannot expect me to type out my lectures again here!!
The year end adjustments are those for accruals and prepayments, irrecoverable and doubtful debts, inventories, and depreciation.
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