- This topic has 1 reply, 2 voices, and was last updated 8 months ago by John Moffat.
October 7, 2021 at 1:41 pm #637199jcafelatte
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P & Co maintain a receivables ledger control account within the nominal ledger. At 30 November 20X0, the total of the list of individual balances extracted from the receivables ledger was $15,800, which did not agree with the balance on the receivables ledger control account. An examination of the books revealed the following information, which can be used to reconcile the receivables ledger and the receivables ledger control account.
1 The credit balance of $420 in Ahmed’s payables ledger account had been set off against his account in the receivables ledger, but no entries had been made in the receivables and payables ledger control accounts.
2 The personal account of Mahmood was undercast by $90.
3 Yasmin’s balance of (debit) $780 had been omitted from the list of balances.
4 Thomas’ personal account balance of $240 had been removed from the receivables ledger as a bad debt, but no entry had been made in the receivables ledger control account.
5 The January total of $8,900 in the sales daybook had been posted as $9,800.
6 A credit note to Charles for $1,000, plus sales tax of $300, had been posted to the receivables ledger control account as $1,300 and to Charles’ personal account as $1,000.
7 The total on the credit side of Edward’s personal account had been overcast by $125.
Which of these items need to be corrected by journal entries in the nominal ledger?
A 1, 3, 4 and 5 only
B 1, 4 and 5 only
C 1, 2, 5 and 6 only
D 2, 3, 6 and 7 only
Dear mr john moffat, can you please explain each 1 2 3 4 5 6 7 because I have no clue how to do it. I am very unfamiliar with the terms. Thanks in advance.October 7, 2021 at 4:20 pm #637208John MoffatKeymaster
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Everything in this example (including all the terms used) is explained in my free lectures on Books of Prime Entry and on Control Accounts.
Please do watch the lectures and then ask again if anything remains unclear, because you cannot expect me to type out all of my lectures 🙂
The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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