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

Compute debt equity ratio and prepare a cash flow statement, 1.From the ...

1.From the following information you are required to prepare a cash Flow statement of XYZ Ltd for the year ended 31 st December 2009 LIABILITIES

Qualitative characteristics of the accounting information, PURPOSE The ...

PURPOSE The purpose of this assignment is to provide learners opportunity to discuss the significance of the significance of the accounting principles and the qualitative chara

Journalizing, petra corporation purchased P4,000 worth of merchandise on ac...

petra corporation purchased P4,000 worth of merchandise on account terms 2/10, n?30, FOB shipping point. Prepaid transportation charges of P200 were added to the invoice.

Goods at branch marked down, GOODS AT BRANCH MARKED DOWN, OR MARKED UP BY A...

GOODS AT BRANCH MARKED DOWN, OR MARKED UP BY AN ADDITIONAL AMOUNT If goods at the branch are not selling well, branch could be authorized by the Head office to mark-down the good

Overhead efficiency variance, The following information is for the third qu...

The following information is for the third quarter of this year:   Planned Actual   Production 92,000 units

Derive the optimal value of loss function, Derive the Optimal Value of Loss...

Derive the Optimal Value of Loss Function A speculative attack and the consequent currency crisis may not be due to excessive money-growth or other misaligned fundamentals, bu

Disclaimer-liquidation of companies, Disclaimer The liquidator may disc...

Disclaimer The liquidator may disclaim onerous property consisting of: 1.    Land burdened with onerous covenants; 2.    Stocks and shares; 3.    Unprofitable contracts, or 4.

Calculate interest rate forecasting, Assume that we are in December 2009 an...

Assume that we are in December 2009 and try to make forecasts of the five year interest rate at the end of January 2010. For this question , you just need to fill out the blank s

Law, define law including contract and bankruptcy

define law including contract and bankruptcy

Define the term- how are businesses organised, Define the term- How are bus...

Define the term- How are businesses organised Nearly all businesses which involve more than a few owners and/or employees are set up as limited companies. This means that finan

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