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net vs total amount

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › net vs total amount

  • This topic has 6 replies, 2 voices, and was last updated 7 years ago by John Moffat.
Viewing 7 posts - 1 through 7 (of 7 total)
  • Author
    Posts
  • April 9, 2015 at 4:43 pm #240675
    mp-open
    Member
    • Topics: 96
    • Replies: 167
    • ☆☆☆

    Hallo,

    Do “net column” and “total column” differ in meaning in the context of the following two sentences, or it means the same?

    1) The net column in the sales day book had been over cast by £200.

    2) The total column of the purchase day book showed a total of £27,980. This was posted to the appropriate ledger account as £29,780 in error.

    Thank you!

    April 9, 2015 at 5:01 pm #240677
    mp-open
    Member
    • Topics: 96
    • Replies: 167
    • ☆☆☆

    Hallo,

    Adding to the above:

    To 1) How do I know that I have to correct only the Sales a/c, and not the A/R a/c as well?

    – e.g. I was solving this by correcting both the Sales and the A/R, without the need of suspense a/c, and obviously I am wrong.

    To 2) How do I know that I have to correct only the A/P control a/c, and not the Purchases, or both of them?

    – here as well, I was solving this by Dr A/P and Cr Purchases, without the need of Suspense a/c, but it’s wrong, how do I know if they mean to correct the A/P or the Purchases a/c?

    Thank you!

    April 10, 2015 at 7:03 pm #240806
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51551
    • ☆☆☆☆☆

    Without seeing the question it is difficult for me to answer.

    The only time that “net” and “total” are likely to be different is if there is sales tax in the question.

    I cannot answer your first question without seeing it.

    For your second question, if the posting to the ledger was in error you would assume that the other postings were correct.

    April 10, 2015 at 9:09 pm #240830
    mp-open
    Member
    • Topics: 96
    • Replies: 167
    • ☆☆☆

    Hallo,

    The question is, but I’m stuck only with the conditions of 1 and 2:

    Muddle’s bookkeeper extracted a trial balance on 31 December 20X4 which failed to agree by £1,850, a shortage on the debit side of the trial balance. A suspense account was opened for the difference.
    In January 20X5 the following errors made in 20X4 were found:

    To 1) The net column in the sales day book had been over cast by £200.

    – why here only the Sales ledger control a/c is affected and not the Receivables control a/c as well, they are both ledger a/c, isn’t that correct, and the Total of SDB goes to both of them, not only to one of them, and worse how to know which one the Sales or the Receivables, as their solution says:

    Dr Sales 200
    Cr Suspense a/c 200

    And I was going to do it like:
    Dr Sales 200
    Cr Receivables a/c 200
    – no need of suspense a/c

    To 2) if the Total of a PDB is wrong how do I know which ledger is the wrong one, they don’t say if it’s the Purchases ledger or the Payables ledger control a/c, as they are both ledger a/cs again to which the the PDB total goes, doesn’t it?

    Their solution is:
    Dr Payables 1800
    Cr Suspense a/c 1800

    and mine was going to be:
    Dr Payables
    Cr Purchases
    – no need of suspense a/c

    Where am I wrong in the two cases?

    Thank you!

    April 11, 2015 at 7:59 am #240855
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51551
    • ☆☆☆☆☆

    1) Sales ledger control is another name for the Receivables ledger control (if you watch the free lecture, I do state this).

    The correct entry to correct the mistake is:
    Dr Sales
    Cr Sales ledger control (receivables ledger control)

    There is no affect on the suspense account

    2) With regard to (2) you are correct – it does not say whether the error is in the purchases account or the payables ledger control account

    I don’t know where you found this question, but it seems a very poor question!

    April 12, 2015 at 4:02 pm #241018
    mp-open
    Member
    • Topics: 96
    • Replies: 167
    • ☆☆☆

    Hallo,

    Yes, I think in both 1 & 2 they don’t say which a/cs are affected.

    And I don’t see the use of suspense a/c.

    This was a paper with examples for f3, but I guess not official that I found to practice more questions.

    Well, I’ll stick to what I’ve learnt, that totals of daybooks go both to the ledger control a/cs and to the other ledger a/cs, e.g. to sales ledger a/c, and sales/receivables ledger control a/c, and to purchases ledger a/c, and purchases/paybles ledger control a/c.

    Thank you!

    April 13, 2015 at 6:43 am #241064
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 51551
    • ☆☆☆☆☆

    You are welcome 🙂

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