ACCA Applied Knowledge · Financial Accounting · Payables account reconciliations
Which of the following is the main purpose of reconciling a payables ledger control account with the list of individual supplier balances?
The purpose is to detect errors in the payables ledger and the control account. Comparing the total of individual supplier balances with the control account balance reveals differences caused by posting mistakes, so they can be investigated and corrected. It is not a check on payment timing or inventory.
- ATo check that suppliers have been paid within their credit terms
- BTo detect errors in the payables ledger and the control accountCorrect
- CTo confirm that inventory has been physically received
- DTo calculate the discounts that the business is entitled to
Explanation
The reconciliation compares the total of the individual supplier balances with the control account balance. Any difference signals an error in one of the two records. It does not test payment timing, inventory receipt or discount entitlement, which need other checks.
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