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ACCA Applied Knowledge · Financial Accounting · Payables account reconciliations

Why is a supplier statement reconciliation considered a useful control over the purchases and payables system?

A supplier statement reconciliation is a useful control because it can reveal unrecorded liabilities, duplicate payments, missing credit notes and incorrectly recorded invoices. This helps ensure payables are complete and accurate, though it does not check goods quality or replace the control account reconciliation.

  1. AIt can reveal unrecorded liabilities, duplicate payments and invoices recorded incorrectlyCorrect
  2. BIt guarantees that all goods ordered have been received in good condition
  3. CIt replaces the need to compare the payables ledger control account with the list of ledger balances
  4. DIt ensures the supplier's bank account details are correct

Explanation

Comparing the supplier's statement with the ledger exposes invoices not recorded, payments recorded twice or at the wrong amount, and missing credit notes. It does not confirm goods quality, and it does not substitute for the payables control account reconciliation, which checks the ledger totals against the general ledger. It does not verify bank details.

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