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ACCA Applied Knowledge · Financial Accounting · Payables account reconciliations

Which of the following is the main purpose of reconciling a supplier statement to the payables ledger account for that supplier?

The purpose is to identify differences between what the supplier says it is owed and what the business records as owing. Differences from timing items or errors can then be investigated. Agreeing ledger totals to the control account is a separate control, not the aim of a supplier statement reconciliation.

  1. ATo confirm that the supplier's invoices have been correctly priced against the purchase order
  2. BTo identify differences in the amounts that the business and the supplier each record as owingCorrect
  3. CTo calculate the discount the business is entitled to claim from the supplier
  4. DTo agree the total of the payables ledger to the trial balance

Explanation

A supplier statement reconciliation compares the supplier's record of the balance with the business's own ledger account for that supplier. Differences arise from timing (goods or cash in transit) or errors. Agreeing the total of the ledger to the control account is a different reconciliation, which is why option D is wrong.

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