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ACCA Applied Knowledge · Financial Accounting · Receivables and payables

Which statement about a supplier statement reconciliation is correct?

A supplier statement reconciliation gives external evidence of the amount owed and can reveal unrecorded invoices, credit notes or errors. It does not prove that all payables are recorded, does not replace control account reconciliation, and should be done routinely rather than only when queried.

  1. AIt provides external evidence of the liability to the supplier and helps detect unrecorded liabilitiesCorrect
  2. BIt proves that all of the company's payables are recorded
  3. CIt replaces the need for the payables ledger control account reconciliation
  4. DIt only needs to be performed when the supplier queries the amount owed

Explanation

A supplier statement is third-party evidence of what the supplier believes is owed, so reconciling it can reveal unrecorded invoices or errors. It does not prove completeness for suppliers who send no statement, and it does not replace the control account reconciliation, which checks the ledger total.

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