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22 August 2017 07:50

Receivables (Sales ledger) control account reconciliation

April Shower sells goods on credit to most of its customer. In order to control its receivable
collection system, the company maintains a receivable control account. In preparing the account for
the year to 30 October 2003 the accountant discovers that the total of all the personal accounts in
the receivables ledger amounts to $12,802, whereas the balance on the receivable control account
is $12,550.

Upon investigating the matter, the following errors were discovered:

a) Sale for the week ending 27 March 2003 amounting to $850 had been omitted from the control
account

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 Upon investigating the matter, the following errors were discovered:

a) Sale for the week ending 27 March 2003 amounting to $850 had been omitted from the control
account
b) A customer’s account balance of $300 had not been included in the list of balances
c) Cash received of $750 had been entered in a personal account as $570
d) Discounts allowed totalling $100 had not been entered in the control account
e) A personal account balance had been undercast by $200
f) A contra item of $400 with the trade payables had not been entered in the control account
g) An irrecoverable debt of $500 had not been entered in the control account
h) Cash received of $250 had been debited to a personal account
i) Discount received of $50 had been debited to Bell’s receivable ledger account
j) Return inward valued at $200 had not been included in the control account
k) Cash received of $80 had been credited to a personal account as $8
l) A cheque for $300 received from customer had been dishonoured by the bank, but no adjustment
had been made in the control accounts

Required:
(i) Prepare a corrected receivable control accounts, bringing down the amended balance as at 1
November 2003
(ii) Prepare a statement showing the adjustment that are necessary to the list of personal account
balances so that it reconciles with the amended receivable control account balance

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 Colin Robbins extracts a list of balances from his purchase ledger on 30 June 20X5 and
arrives at a total payables figure of $1,730. The balance on the purchase ledger control
account in the general ledger is $1,885. Further examination of his accounting records
reveals the following errors:

(i) The purchase day book total for the month was overcast by $80.

(ii) The cheque payments day book total in the analysis column headed 'payables' was recorded
as $936 instead of $963.

(iii) A balance of $48 owing to G Radcliffe had been omitted from the list of purchase ledger
balances.

Show how the purchase ledger control account is adjusted for these errors and produce a
reconciliation of the purchase ledger control account and the list of purchase ledger balances.

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