Acca financial Accounting (FA) Study Text ac ca (FA)

Prepare the part of the payables’ ledger control account

reflecting the above information.

(ii)

Prepare a statement reconciling the original total of the

individual balances with the corrected balance on the control

account.

 

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Control account reconciliations 

248

 

KAPLAN PUBLISHING

 

Solution to Illustration 1 

The best way to approach the question is to consider each of the points 

above in turn and ask to what extent each issues affects (i) the 

payables’ ledger control account and (ii) the listing of payables’ ledger 

balances. 

Step 1 

The total of discount received in the cash book should have been 

debited to the payables’ ledger control account and credited to discount 

received. Thus, if the posting has not been entered in either double 

entry account it clearly should be. As this has already been entered into 

the individual ledger accounts, no adjustment is required to the list of 

balances. 

Step 2 

Individual credit balances are extracted from the payables’ ledger. 

Here, this error affects the ledger accounts balance. No adjustment is 

required to the control account, only to the list of balances. 

Step 3 

The question clearly states that the error has been made in the 

individual ledger accounts. Amendments should be made to the list of 

balances. Again, no amendment is required to the control accounts. 

Step 4 

The total of the purchases day book is posted by debiting purchases 

and crediting payables’ ledger control account. If the total is 

understated, the following bookkeeping entry must be made, posting 

the $2,000 understatement: 

Dr Purchases 

$X 

Cr Payables’ ledger control account 

$X 

As the individual ledger accounts in the payables’ ledger are posted 

individually from the purchases day book, the total of the day book 

being understated will not affect the listing of the balances in the 

payables’ ledger. 

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