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ACCA Applied Knowledge · Financial Accounting · Sales and purchases

Orla Ltd's sales day book total for April was posted to the general ledger as $53,600 instead of the correct $56,300, because two invoices totalling $2,700 were omitted from the total. The individual invoices were posted correctly to the receivables ledger. What is the effect on the receivables ledger control account reconciliation?

The receivables control account is $2,700 lower than the sum of the individual receivables ledger balances. The day book total was understated, so the control debit was too small, while the individual customer accounts were correctly debited with every invoice.

  1. AControl account is $2,700 lower than the sum of the ledger balancesCorrect
  2. BControl account is $2,700 higher than the sum of the ledger balances
  3. CControl account is $5,400 lower than the sum of the ledger balances
  4. DNo difference arises, as the sales account is also understated

Explanation

The control account was debited $53,600 rather than $56,300, so it is $2,700 lower than the total of individual receivables balances, which include the invoices. The sales account is also understated, but this does not remove the difference between control account and ledger. Doubling is only for a transposition between debit and credit, which did not happen.

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