Prepare a purchases ledger control account, Financial Accounting

Assignment Help:

Question:

The following information was extracted from the books of William Noel for the year ended 30 April 2009.
                                                                            Rs
Purchases Ledger Balance as at 1 May 2008    43120
Credit purchase for the year                             824 140
Credit purchases returns                                  12 400
Cheques paid to creditors                                 745 980
Cash purchases                                                 8 940
Discount received on credit purchases               31 400
Credit balances transferred to sales ledger accounts 5 210

The total of the balances in Noel's purchases ledger amounts to Rs 67 660, which does not agree with the closing balance in the Control account.

The following errors were then discovered:

1. Discount received had been overstated by Rs 1 000.
2. A credit purchases invoice for Rs 2 040 had been completely omitted from the books.
3. The purchases ledger account had been understated by Rs 100.
4. A credit balance of Rs 850 in the purchases ledger had been set off against a contra entry in the sales ledger, but no entry had been made in the control accounts.
5. A payment of Rs 1 450 had been debited to the creditor's account but was omitted from the bank account.
6. A credit balance of Rs 3 210 had been omitted from the list of creditors.

Required:

a. Prepare a Purchases Ledger Control Account for the year ended 30 April 2009.

b. Explain why it is useful to maintain a control account in respect of both trade receivables and trade payables.

c. Explain briefly how a contra entry might arise.


Related Discussions:- Prepare a purchases ledger control account

Required: prepare journal entries for the above transactions, Sleek Ride, a...

Sleek Ride, a company providing limo services, has a December 31 year-end date. For Sleek Ride, the following transactions occurred during the ?rst 10 days of June: a. Purchased, o

Recieving order., 1.The debtor retains ownership, but loses possession and ...

1.The debtor retains ownership, but loses possession and control of his property

Accrual Accounting-adjusting entry, What are some examples of adjusting ent...

What are some examples of adjusting entries that are made at the end of the accounting period to bring general lever accounts balance in accordance with GAAP.

Partnership accounting, How does ordinary shares and preference shares incl...

How does ordinary shares and preference shares included in the account

Show the expatriation tax, Q. Show the Expatriation Tax? Expatriation T...

Q. Show the Expatriation Tax? Expatriation Tax - Individuals who loose or terminate their residency within 10 year period immediately preceding the close of a tax year, if term

Calculate the total capital, The current balance sheet of CBKH shows $800 m...

The current balance sheet of CBKH shows $800 million of corporate loans ($500 million of which being rated AA- and the remaining rated BBB+), $200 million of bonds issued by an OEC

Modern techniques economic order quantity, The economic demand quantity can...

The economic demand quantity can also be found out with the assist of a graph. In this technique ordering cost, carrying cost and total inventory costs as per various lot sizes are

Real estate investment trust, Real Estate Investment Trust (REIT) - Investo...

Real Estate Investment Trust (REIT) - Investor-owned TRUST that invests in real estate and, in place of paying income tax on its income, reports to each of its owners her or his pr

Prepare an investment plan, Question: Mada Air Ltd is thinking of diver...

Question: Mada Air Ltd is thinking of diversifying its activities in order to cope with the financial crisis. After careful evaluation its research and development team has pro

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd