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Reconciling the sales ledger control account ..., Lecture notes of Financial Accounting

New England Association of Schools and CollegesFinancial Accounting

a) Prepare a sales ledger control account from the above details. Show clearly the balance carried down at 30 April and brought down at 1 May. Debit. Credit.

Typology: Lecture notes

2021/2022

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Reconciling the sales ledger control account: questions
1 This is a summary of transactions with customers during the month of April
Balances due from customers at 1st April £201,305
Goods sold on credit (inc. VAT) £80,470
Money received from credit customers £110,280
Discounts allowed £330
Goods returned by credit customers (inc. VAT) £2,040
a) Prepare a sales ledger control account from the above details. Show clearly
the balance carried down at 30 April and brought down at 1 May
Debit Credit
The following closing balances were in the Subsidiary (sales) ledger on 30 April
KLP Contractors £56,988
JOB Workings Ltd £29,460
Heslop & Buxton £10,069
Ferris Proctor £46,689
Moorlands International £2,315
Concept Ideas -£145,521
b) Reconcile the balances shown above with the sales ledger control account balance
you have calculated in part (a)
Sales ledger control account balance as at 30 June
Total of subsidiary (sales) ledger accounts as at 30 June
Difference
c) What is the most likely cause of the difference you calculated in part (b)?
SALES LEDGER CONTROL ACCOUNT
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Reconciling the sales ledger control account: questions

1 This is a summary of transactions with customers during the month of April Balances due from customers at 1st April £201, Goods sold on credit (inc. VAT) £80, Money received from credit customers £110, Discounts allowed £ Goods returned by credit customers (inc. VAT) £2, a) Prepare a sales ledger control account from the above details. Show clearly the balance carried down at 30 April and brought down at 1 May Debit Credit The following closing balances were in the Subsidiary (sales) ledger on 30 April KLP Contractors £56, JOB Workings Ltd £29, Heslop & Buxton £10, Ferris Proctor £46, Moorlands International £2, Concept Ideas -£145, b) Reconcile the balances shown above with the sales ledger control account balance you have calculated in part (a) Sales ledger control account balance as at 30 June Total of subsidiary (sales) ledger accounts as at 30 June Difference c) What is the most likely cause of the difference you calculated in part (b)?

SALES LEDGER CONTROL ACCOUNT

2 This is a summary of transactions with customers during the month of January Balances due from customers at 1st January £60, Goods sold on credit (inc. VAT) £270, Money received from credit customers £281, Contra entry (set off with PLCA) £4, Goods returned by credit customers (inc. VAT) £3, Journal to correct an error (debit entry) £ a) Prepare a sales ledger control account from the above details. Show clearly the balance carried down at 31 January and brought down at 1 February Debit Credit The balances in the sales ledger on 1 February totalled £43, b) Reconcile the balances shown above with the sales ledger control account balance you have calculated in part (a) Sales ledger control account balance as at 31 January Total of sales ledger accounts as at 31 January Difference c) Identify TWO reasons, either of which might have caused the difference Reason Tick Goods returned of £876 (inc. VAT) have been omitted from the sales ledger The total of the Sales ledger column in the cash book was undercast (i.e. too low) by £ An irrecoverable debt of £876 (inc. VAT) was only recorded in the sales ledger The journal to correct an error was omitted from the sales ledger The journal to correct an error was included in the sales ledger twice Sales of £876 (inc. VAT) have been omitted from the sales ledger

SALES LEDGER CONTROL ACCOUNT

4 A business sales ledger control account and sales ledger balance as at the same date are shown below Sales ledger balances £ £ Smithers £ Balance b/d 2156 Sales returns 389 Johnston £ Sales 15843 Bank 16100 Elgin £ Contra 520 Lemston £ Balance c/d 990 Munster £ 17999 17999 Fallows £ Balance b/d 990 TOTAL £1, Which of the following reasons might have caused the difference between the sales ledger control account and the total of the sales ledger balances? Reason Tick A sales invoice for £10 was included twice in the sales ledger Contras were recorded incorrectly in the sales ledger control account. The correct figure was £10 more; i.e. £ A bank receipt from Elgin for £10 was omitted from the total of the Trade Receivables column in the cash book A sales returns for £10 was omitted from the sales ledger The Smither's account in the sales ledger balances listing should have been recorded as an overpaid balance Sales ledger control account