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ACCA Applied Knowledge · Financial Accounting · Payables account reconciliations

When Brenton Ltd compares a supplier's statement with the supplier's account in its payables ledger, which of the following is the most likely reason for a difference that requires NO adjustment to Brenton's own ledger?

A cheque sent by Brenton shortly before the statement date but not yet received by the supplier needs no ledger adjustment. It is a timing difference already correctly recorded by Brenton. Duplicate invoices, omitted credit notes and misposted payments are errors in Brenton's own records and must be corrected.

  1. ABrenton recorded a purchase invoice twice
  2. BBrenton paid the supplier by cheque shortly before the statement date and the supplier has not yet received itCorrect
  3. CBrenton omitted to record a credit note received from the supplier
  4. DBrenton posted a payment to the wrong supplier's account

Explanation

A cheque in transit is a timing difference: Brenton has correctly recorded the payment, and the supplier will record it later. This is a reconciling item on the supplier side only. The other three options are errors in Brenton's own records that must be corrected in its ledger.

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