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

Explain the transaction exposure versus economic exposure, Explain the Tran...

Explain the Transaction Exposure versus Economic Exposure? In brief describe the following term: a) Spot market and forward market.  b) Purchasing Power Parity or PPP.

Taxtomy of intermediaries, Ask quwhats taxtonomy of intermediaries estion #...

Ask quwhats taxtonomy of intermediaries estion #Minimum 100 words accepted#

Small bankruptcies-bankruptcy and liquidation, SMALL BANKRUPTCIES The c...

SMALL BANKRUPTCIES The court may order the estate of a debtor to be administered summarily, if the debtor's assets are not likely to exceed Shs 12,000 in value.  This is known

Illustration: holding company with direct share holding, Illustration: Hold...

Illustration: Holding company with direct share holding Rain Ltd., Storm Ltd. and Thunder Ltd. are in the business of manufacturing tents. Their balance sheets as at 30 September

Statement of cash flows, Statement of Cash Flows - A statement of cash flow...

Statement of Cash Flows - A statement of cash flows is one of the fundamental financial statements which is required as part of a complete set of financial statements prepared in c

Revaluations, Revaluations Partners rarely revalue their assets and any r...

Revaluations Partners rarely revalue their assets and any revaluations may be carried out when a new partner is being admitted or an old partner is retiring.   To facilitate th

structural programming languages in industry today, Write  the advantages ...

Write  the advantages and drawbacks of both the structured and object-oriented (OO) paradigm in programming. Describe the perceived preference of OO languages over the more structu

Ratios, equity share capital rs 10 200 10% preference share capital 80 15%...

equity share capital rs 10 200 10% preference share capital 80 15% debenture 20 profit before interest and taxes 60 proposed dividend 20 provision fo

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