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ACCA Applied Knowledge · Financial Accounting · Payables account reconciliations

At 31 December, Harlow Co's payables ledger control account shows $91,000 credit. The list of supplier balances totals $90,200. Investigation finds: (1) a supplier invoice for $1,400 was entered in the supplier's account as $1,040; (2) a payment of $600 to a supplier was debited to the wrong supplier's account (a different supplier) but correctly posted in the control account; (3) the purchase returns day book was undercast by $700. After correcting all errors, what are the revised control account balance and the revised list total?

The control account is corrected to $90,300 by deducting the $700 undercast returns from $91,000. The list becomes $90,560 by adding the $360 invoice understatement. The misposted payment does not change the list total.

  1. AControl $91,700; list $91,360
  2. BControl $90,300; list $90,560Correct
  3. CControl $90,300; list $90,560 is wrong; control $90,300 and list $90,300
  4. DControl $91,000; list $90,560

Explanation

Undercast returns of $700 mean the control account credit is too high, so control is $91,000 - $700 = $90,300. For the list: $90,200 plus the invoice understatement of $360 (1,400 - 1,040) gives $90,560. The misposted payment affects only the wrong supplier's balance, so the list total is unchanged. The corrected figures are therefore control $90,300 and list $90,560, and they still differ by $260, which indicates further unresolved errors.

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