PRACTICE QUESTIONS: SECTION 1

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Whkh olthe following are documents issued b;::customer in a transaction rather than
the supplier?

A Quotation, goods delivery note and debit note

B Goods delivery note, remittance advice and sales order

'ks)
C Purchase order and debit note

D Sales dr0er, purchase invoice and remittance advice (2 marks)

CONTROL ACCOUNTRECOI\JCILIATIONS
" ").:

1.21 A payables ledger control account showed a credit balance of $768,420. The payables
Irks)
ledger totalled $781,200. .

look Which one of the following possible errors could account in full for the difference?

A A contra against a receivables ledger debit balance of $6,390 has been entered on
the credit side of the payables ledger control account
sales
B The total of discounts allowed $28,400 was entered to the debit side of the payables
ledger control account instead of the correct figure for discounts received of $15,620
sales
C $12,780 cash paid to a supplier was entered on the credit side of the supplier's
account on the payables ledger
with
n The total of discounts received $6,390 has been entered on the credit side of the
payables ledger control account (2 marks)
t sales
narks) The payables ledger control account below contains a number of errors:

Payables ledger control account

claims
of the $ $
to the Balance blf
paid to suppliers Purchases 1,268,600 Cr·
PIJrchase returns Contras against debit balances 48,000 \Dr
in receivables ledger
I~~funds received from suppliers 2,700 Discounts received 8,200 ~J
marks) C, Balance clf 402,000

1,726,800 1,726,800

relate to credit purchases.

should be the closing balance when all the errprs are corrected?

$:1.28,200
Z marks)
$S09,OOO
$224,200
$144,600 (2 marks)

:L!SHING 37
 ..... I'HAUlel QUI'S .

~ Ordan received a statement from one 01 Its supp!;ers, A recelva bles ledger co ntrol . . . . . f ' ' 'N S , SECT ION 1
~J $3,980. the amount due according to the payabl es ledger account 01 Ordan was only
Alta, showing a balance due 01 127
customers'
could be duea,ccounts
to, 'm the r..,elvables
account showed
ledger ashowed
debit bal';nce of $37,642. The Individual
a otal of $35 " 840 The d'ff
I erence

$230,
comparison of the statement and the ledger account revealed the following difference" A unde;casting the sales day book by $1 802
1 A cheque sent by ardan for $270 has not been recorded in Alta's statement B overcasting the sales returns day bOO: b $1
enter' y ,802
2 Alta has not recorded goods returned by Ordan $180. c mg a cash receipt of $1,802 on the debit s'd f
3 arda made a contra entry, reducing the amount due to Alta by $3,200, for a balance entering a cash discount allowed of leo a customer's account
[) $901 on the debit side of the control account
due from
n Alta in ardan's receivables ledger. No such entry has been made in Alta's

records. T.rbuck has received a t (2 marks,

:oa:~ment
t~UPPhers,
What difference remains between the twO companies' records after adjusting for these outstanding balance due of account from one of its '
•following Is determined, em of $1,350. On comparison with showing the
e ledger account, an
items?
A $460 ll1(~ ledger account shoWS

III '1 he supplier has dis lI a credit balance of $260.

B $640 , n. le supplier has not yet allowed for

a owed a cash discount f $

0 80 due to late payment of an Invole

l2 markS)
C $6,500 r.
" Cash in transit of $830 has not been goods
r . returned at the end of t eh '
penod of $270e.
D $100 ollowlng consideration f h' ecelved by the supplier. '
IS: , 0 t ese Item s, t he unreconciled difference b
124 A business' r..,elv.bl ledger control account did not agree with the total of the balances ,70 etween the two
es
on the receivables ledger. An Investigation revealed that the sales day book had been
overcast by $10, What effect will this have on the discrepancy?

A The control account should be credited with $10

$430
B The control account should be debited with $10
The control account should be credited with $20 l2 marks)
C fUtrdmse day book of A b (2 marks)

~fiiIl1Hlfi'~' r~celvables
~d the sales
The control account should be debited with $20 bl'lfil
D , . . 11. Overcast by $700. rArb
roath has b.een. undercast by $500 a
... part of the doubl roath marntams payable, and day book
A supplier sends Lord a statement showing a balance outstanding 01 $14,350. Lord's .• e entry bookkeeping system. ledger control

records shoW a balance outstanding of $14,500.

01 correcting these e rrors will
. be to:
The reason for this difference could be that: urlJl'stments to Ithe I d
With r1CJ effect on proft e ger balances of the individual customers and suppliers
A the su pplier sent a n Invoice for $150 which you have not yet received
B the supplier has allowed you $150 cash discount which you had omitted to enter in "llus'ITIe"ts to the led .
~1 . '
decrease in profit of $1g~~obalances of the individual custom ersand suppliers
your ledgers
C you have paid the supplier $150 which he has not yet accounted for '"Iu,tments
. . to the control accounts, with n '
D (2 marks)
you have returned goods worth $150 which the supplier has not yet accounted for !HJjustments to th 0 effect on profit
e control accounts, with a decrease in profit of $1,200
(2 marks)

126 Which 01 the following would NOT lead to a difference between the total 01 the balances
on the receivables ledger and the balance on the receivables ledger control account?

A An error in totalling the sales day book

An error in totalling the receipts column of the cash book
B
An overstatement of an entry in a customer's account
C
An entry posted to the wrong customer's account
D

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 pnACTICE QUESTIONS: SECTION 1

For the month of November 20XO Figgin's purchases totalled $225,600 with sales tax of

133 Jo's bankofledger

balance account
$250 credit . shows a baJ ance of $190 credit. Her bank statement reports a
$33,840. The total of $259,440 has been credited to the payables ledger control account

as $254,940.

Which of the following will explain the d'ff

I erence .In full?
Which of the following adjustments is correct?
A .

List of suppliers' balances Unpresented cheques of $100 an d an uncleared lodgement of $30

control account
B Unpresented
'd e af the
cheques of $150' th e mlspostlng
. . of a
No adjustment Sl cash account and unrec d . cas h receipt
. of $130 to the wron
A $4,500 Cr or ed bank Interest received of $30 g
Increase by $4,500
B $4,500 Cr C An unrecorded
lodgement . of $30' a dishonoured
direct debit
of $40 . cheque of $70 and an uncleared
No effect
C $29,340 Dr (2 marks)
Increase by $4,500 o
error whereby Jo's account was aCcide~:a~1 unprde.sente~ cheque of $110 and(2 a bank
An unrecorded standing order of $60
0 $33,840 Dr
. y cre Ited with $110 marks)
In reconciling the receivables ledger control account with the list of receivables ledger
balances of SK, the following errors were found: Which
1 of the followin
. g statements about bank reconciliations are correct?

1 The sales day book had been overcast by $370. . In preparing a bank reconciliation un
balance of cash at bank shown in th' bPreksented cheques must be deducted from a
2 A total of $940 from the cash receipts book had been recorded in the receivables e an statement
A h .
ledger control account as $490. c :que fro~ a customer paid into the bank but .
making a debit entry in the cash book. dishonoured must be corrected by
What adjustments must be made to correct the errors?
A Credit sales control account $820. Decrease total of receivables ledger balances by 'J . ban k must be corrected by an entry .In the cash book.

An error by the
An overdraft IS a debit balance in the bank st at ement

$820
B Credit sales control account $820. No change in total of receivables ledger balances. 1 and 3 '

C Debit sales control account $80. No change in total of receivables ledger balances 2 and 3
Debit sales control account $80. Increase total of receivables ledger balances by $80 I and 4
(2 marks)
o
'2 and 4 (2 marks)

BANK RECONC1~ONS !$~~kk«u:~per

. . . . following bank reconciliation
at 31 December 20X5:
statement h
as been prepared by an inexperienced

132 The cash book of worcester shows a credit balance of $1,350. Cheques of $56 have been $

written to suppliers but not yet cleared the bank; uncleared lodgements amount to $128. rwr bank statement (overdrawn) 38,640

The bank has accidentally credited worcester's account with interest of $15 due to !udBt'1!IJents not credited 19,270

another customer. A standing order of $300 has not been accounted for in the general
57,910

ledger. What is the balance on the bank statement?

Ullptlmmted cheques 14,260

A $993 Cr
43,650
B $993 Dr
$1,707 Cr (2 marks) tilt! final cash book balance be when all the ab ave Items
. have been properly
C

o $1,707 Dr

(2 marks)

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