Page 202 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 14

Example 1

Receivables’ ledger control reconciliation

Cathode maintains ledger control accounts as part of its double-entry
accounting system. At 31 March 20X4, the balance on the trade receivables’
ledger control account was $128,545, and the total of the trade receivables’
ledger account balances was $127,036.

A review of the accounting records as at 31 March 20X4 identified a number
of issues.

(i) The sales day book total for January 20X4 of $29,450 had been posted
as $29,540.

(ii) A credit balance of $128 on a receivable ledger account had been listed
as a debit balance.

(iii) An irrecoverable debt of $240 had been written off correctly in the
receivables ledger account, but no entry had been made in the trade
receivables’ ledger control account.

(iv) A contra of $1,000 had been agreed with Diode between the amounts
owed to/from that entity. Cathode had made the appropriate accounting
entries in the individual payable and receivable ledger account of Diode,
but no entries had been made in the ledger control accounts.

(v) A debit account balance of $435 had been omitted from the total of the
receivables’ ledger account balances.

Required:

Reconcile the balance on the trade receivables’ ledger control account
with the total of the trade receivables’ ledger balances as at 31 March
20X4.

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