Chapter 4

Question 1

What should the balances in the subsidiary receivable and payable ledger agree with

Answer 1

The receivables and payable ledger control account

Question 2

What causes differences between the ledger account and the control account

Answer 2

Only recording an item in the control account or ledger
Over or understating an item
Duplicating an item
Posting item to wrong account

Question 3

The total on the receivables ledger will be higher than the control ledger if

Answer 3

A sales invoice has been duplicated in the receivables ledger
A cash receipt from a credit sale has been omitted from the receivables ledger but recorded in the rcla
A sales return credit note has been omitted from the receivables ledgers but recorded in the rcla

Question 4

The total on the rcla will be higher than the recievebales ledger if

Answer 4

Sales are recorded in the credit sale of the receivables ledger but posted correctly to the control account
The total column in the sales book has been overstated
The total column showing bank recovers from credit customers has been understated
Discounts allowed posted twice in the rl but once in the rlca

Question 5

The total I. The payable ledger will be higher than the payable ledger control if

Answer 5

A purchase invoice has been duplicated in PL
A cash payment to a credit supplier has been omitted from the payable ledger but is still included in the pcla
A purchase returns credit note has been omitted from the payable ledger but is still included in the pcla
Discounts recieved has been omitted from the payable ledger but is still included in the pcla

Question 6

The total in the payable ledger control account will be higher than pl if

Answer 6

Purchases are recorded on the debit side of the payable ledger
The total column in the purchases day book has been overstated
The total column showing payments to credit suppliers has been understated
Goods returned have been entered twice in the pl but only once in plca

Question 7

What is one of the tasks for credit control

Answer 7

To ensure that receivables pay on a timely basis and that any payments are followed up promptly

Question 8

What is an aged trade receivables analysis?

Answer 8

A schedule showing for each credit customer, how long the component parts of the balance have been unpaid.

Question 9

What is irrecoverable debt

Answer 9

A debt which is believed will never be recovered

Question 10

What is the double entry for writing off irrecoverable debt?

Answer 10

Debit the irrecoverable debt expense account and the vat control account and credit the rlca