Skip to content

ACCA Applied Knowledge · Financial Accounting · Sales and purchases

At the month end, the sales day book of Lena Co was totalled as $84,600 but an invoice for $4,500 was entered as $5,400 in the day book, and the individual receivables ledger account was correctly posted at $4,500. The day book total was posted to the receivables control account and sales. Ignoring sales tax, which statement is correct after the day book totals are posted?

The receivables control account exceeds the sum of the individual customer balances by $900, and sales are overstated by $900. The day book entry was $900 too high, and this inflated total was posted to the control account and sales, while the customer account was correct.

  1. AReceivables control exceeds the sum of the individual ledger balances by $900, and sales are overstated by $900Correct
  2. BReceivables control is lower than the sum of the individual ledger balances by $900, and sales are overstated by $900
  3. CReceivables control exceeds the sum of the individual ledger balances by $900, and sales are understated by $900
  4. DThe control account agrees to the individual ledgers but sales are overstated by $900

Explanation

The day book overstated the invoice by $900, so the total posted to control and sales is $900 too high. The individual account is correct at $4,500. Control therefore exceeds the subsidiary ledger total by $900 and sales are overstated by $900. The option claiming agreement is wrong because the two postings differ.

Did you get it right without looking?

One question tells you little. A timed set on Sales and purchases shows your real accuracy, how long you take and where you lose marks.

Practise Sales and purchasesFree diagnostic mock

More Sales and purchases questions