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ACCA Applied Knowledge · Financial Accounting · Payables account reconciliations

Which one of the following is the main purpose of reconciling a supplier's statement to the supplier's account in the payables ledger?

The purpose is to check that the balance the supplier says is owed agrees with the entity's own payables ledger account, and to identify and explain any differences. It is a check on individual supplier accounts and does not replace the payables control account reconciliation.

  1. ATo confirm that the supplier's inventory records are accurate
  2. BTo check that the balance owed to the supplier agrees with the entity's own records, or to explain the differencesCorrect
  3. CTo calculate the discount the supplier should allow on future purchases
  4. DTo replace the need for the control account reconciliation

Explanation

The reconciliation compares the supplier's statement with the entity's ledger account for that supplier. Differences such as timing items or errors are identified and explained. It does not replace the control account reconciliation, which checks the total of the ledger balances to the control account.

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