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Hi Sir. Can you help me with this question please. I have some difficulties to understand it. Thank you in advance.
Tarbuck has received a statement of account from one of its suppliers, showing an
outstanding balance due to it of $1,350. On comparison with the ledger account, the
following was identified:
? The ledger account shows a credit balance of $260.
? The supplier has disallowed a cash discount of $80 due to late payment of an invoice.
? The supplier has not yet allowed for goods returned at the end of the period of $270.
? Cash in transit of $830 has not been received by the supplier.
Following consideration of these items, what was the unreconciled difference between
the statement of account from the supplier and Tarbuck’s ledger account?The difference between the balance shown as owing by the supplier and the balance in Starbucks own books is 1350 – 260 = 1090.
This difference should be explained by the three items listed. However they only explain a difference of 80 +270 + 830 = 1180. So the remaining difference is not explained (i.e. is unreconciled).
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