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ACCA Applied Knowledge · Financial Accounting · Payables account reconciliations

At 31 March the payables ledger control account of Harlow Co shows a credit balance of $48,600. The list of individual supplier balances totals $48,250. Investigation finds that a purchase invoice for $350 was entered in the purchases day book but was never posted to the supplier's individual account. What is the correct action?

Credit the supplier's individual account with $350. The invoice was already in the control account through the day book total, but was omitted from the ledger account. Posting the credit raises the list of balances from $48,250 to $48,600, so it agrees to the control account.

  1. ADebit the control account with $350
  2. BCredit the supplier's individual account with $350Correct
  3. CDebit the supplier's individual account with $350
  4. DCredit the control account with $350

Explanation

The control account includes the invoice, so it is $48,600 correctly. The individual account is missing a credit of $350, so crediting it raises the list total from $48,250 to $48,600, which agrees. Adjusting the control account would wrongly create a new difference.

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