- 1 Marks
Question
Tomiwa’s individual receivables ledger balances totaling N500,000 do not agree with her receivables control account. The following errors were found:
(i) Credit note for N7,500 was not recorded in the receivables ledger
(ii) Contra entry of N20,000 was entered in the individual payables ledger account but not in the receivables and payables ledger control accounts
What should be the total of the balance on her receivable ledger control account after correcting the above errors?
A. N527,500
B. N500,000
C. N492,500
D. N482,500
E. N472,500
Answer
E. N472,500
Explanation:
The receivables control account needs to be adjusted for the errors. The total balance of N500,000 is reduced by the credit note (N7,500) and the contra entry (N20,000). Therefore, the corrected balance will be N472,500 (500,000 – 7,500 – 20,000).
- Tags: Adjustments, Control Account, Errors, Receivables
- Level: Level 1
- Topic: Control Accounts
- Series: MAR/JULY 2020
- Uploader: Theophilus