Reconciliation – Knowsia

FA – L1 – Q61 – Control accounts and account reconciliations

Reconcile accounts receivable ledger control account with ledger balances for Nelson Ltd. Clear suspense account for Nelson Ltd by posting corrections for trial balance errors.

Question

The trial balance of Nelson Ltd includes the following items:

	GH₵
Accounts receivable ledger control account	115,440
Accounts payable ledger control account	80,901
Suspense account (debit balance)	3,310

The following information is available:
(1) The total of debit balances in the accounts receivable ledger is GH₵116,374 and the total of credit balances is GH₵1,234.
(3) The accounts receivable ledger includes a debit balance of GH₵700 for Entity D, and the accounts payable ledger includes a credit balance of GH₵800 relating to Entity D. Only the net amount will eventually be paid.
(4) Included in the credit balances in the accounts receivable ledger is a balance of GH₵600 in the name of P. Smith. This arose because a sales invoice for GH₵600 had earlier been posted in error from the sales day book to the debit of the account of M. Smith in the accounts payable ledger.
(5) An allowance of GH₵300 granted to a customer for some damaged goods had been omitted from the appropriate account in the accounts receivable ledger. This allowance had been included in the accounts receivable control account.
(7) A cash receipt from a credit customer for GH₵345 had been entered in the cash book as GH₵245.

Required:
(a) Prepare a reconciliation of the accounts receivable ledger control account and the accounts receivable ledger balances.

(b) Open a suspense account and post the entries required to clear this account.

Answer

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Tags: Contra entries, Control Accounts, Ledger errors, Receivables ledger, Reconciliation
Level: Level 1

Topic: Control accounts and account reconciliations

FA – L1 – Q54 – Inventory

Define inventories and net realisable value under IAS 2 for AfraHealth Ltd.

Question

(A) Under IFRS Accounting Standards, IAS 2 deals with inventories. Define the following terms:

(i) Inventories

(ii) Net realisable value

(A) AfraHealth Ltd. controls its creditors’ accounts by preparing monthly creditors’ ledger control account in two parts, Upper and Lower Regions.
The following figures were available as at January 31st 20X9 when there was a difference of GH¢3,000 on the Trial Balance.

Upper Region	GH¢	Lower Region	GH¢
Credit Balance b/d	15,600	Credit Balance b/d	10,200
Debit Balance b/d	2,500	Debit Balance b/d	284
Purchases	115,200	Purchases	18,500
Returns	8,000	Returns	1,400
Charges	800	Charges	120
Bank	30,500	Bank	15,200
Discount	2,500	Discount	1,520
Balance c/d	1,500	Balance c/d	1,300

On 31st January, 20X9 the officer in charge of Upper Region Ledger declared GH¢89,600 while that of Lower Region declared GH¢15,016.
You are required to:
(i) Prepare creditors ledger control account for the Upper and Lower Regions respectively.
(ii) Draw any conclusion you can from the two control accounts.

Answer

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Tags: Control Accounts, Creditors Ledger, Financial accounting, Reconciliation, Trial Balance
Level: Level 1

Topic: Control accounts and account reconciliations

FA – L1 – Q15 – Control accounts and account reconciliations

Record Kweku's May transactions in receivables and payables control accounts using T accounts.

Question

The following are the transactions of Kweku, who commenced a new business on 1 May.

May

Transaction	Details
1	Started the business with capital of GH₵2,500,000, paid into a business bank account.
2	Bought goods on credit from the following entities: Elliot GH₵810,000; Martinez Traders GH₵1,305,000; Grayson GH₵375,000; Legacy GH₵1,140,000; Linden GH₵960,000. (Total: GH₵4,590,000).
3	Sold goods on credit to: Benson Retail for GH₵753,000, Quickmart for GH₵1,120,000 and Sanders for GH₵3,080,000. (Total: GH₵4,953,000).
4	Benson Retail paid by cheque GH₵723,000 taking a discount of GH₵30,000 for early payment. Benson Retail had not been expected to take the discount when the goods were originally sold to them.
5	Sanders paid GH₵1,500,000 by cheque.
6	GH₵700,000 was paid to Elliot.
7	The following payment was made to Grayson: GH₵350,000. A discount of GH₵25,000 was received for early payment.
8	Paid carriage outwards: GH₵345,000.
9	Purchase returns to Legacy GH₵400,000.
10	Sales returns from Sanders: GH₵270,000.
11	Purchases on credit from Martinez Traders GH₵753,000; Legacy GH₵1,650,000. (Total: GH₵2,403,000).
12	Sold goods on credit to Quickmart GH₵1,005,000.

Kweku maintains control accounts for receivables and payables in the main ledger, and accounts for individual customers and suppliers in a receivables ledger and a payables ledger respectively.

Required
(a) Use T accounts to show how the relevant transactions will be recorded in the receivables control account and the payables control account in the main ledger of Kweku in May. (You are not required to prepare T accounts for any of the other main ledger accounts.)

(b) Show the list of balances in the receivables ledger after recording the above transactions.

Answer

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Tags: Account Balances, Control Accounts, Discounts, Payables Ledger, Purchase Returns, Reconciliation
Level: Level 1

Topic: Control accounts and account reconciliations

Tag (SQ): Reconciliation

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FA – L1 – Q61 – Control accounts and account reconciliations

Reconcile accounts receivable ledger control account with ledger balances for Nelson Ltd. Clear suspense account for Nelson Ltd by posting corrections for trial balance errors.

FA – L1 – Q54 – Inventory

Define inventories and net realisable value under IAS 2 for AfraHealth Ltd.

FA – L1 – Q15 – Control accounts and account reconciliations

Record Kweku's May transactions in receivables and payables control accounts using T accounts.

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FA – L1 – Q61 – Control accounts and account reconciliations

Reconcile accounts receivable ledger control account with ledger balances for Nelson Ltd. Clear suspense account for Nelson Ltd by posting corrections for trial balance errors.

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FA – L1 – Q54 – Inventory

Define inventories and net realisable value under IAS 2 for AfraHealth Ltd.

You're reporting an error for "FA – L1 – Q54 – Inventory"

FA – L1 – Q15 – Control accounts and account reconciliations

Record Kweku's May transactions in receivables and payables control accounts using T accounts.

You're reporting an error for "FA – L1 – Q15 – Control accounts and account reconciliations"

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