Debtors and Creditors Reconciliation statement
Exercise No 1:
Balance as in the debtors control account : 5478 (Debit)
List of balances in the sales ledger : 2572
Balance as in the creditors control account: 7368 (Credit)
List of balances in the purchase ledger: 4334
Balances of control accounts did not match with the List of balances and following errors have been
revealed from the further investigations.
1) Rs. 360 worth of trade receivable has been omitted from the list of balances.
2) Total of the Trade payable column in the cash payment journal has been overcast by Rs. 300
3) List of balances in the purchase ledger has been understated by Rs. 500.
4) Rs.160 of trade receivable has been written off as bad debt. This was recorded in nowhere other than in
the general ledger.
5) Rs. 40 of return inward has been recorded in the return inward journal as Rs. 60.
6) Total of cash paid to the trade payables Rs. 2875 has been debited to the debtors control account
mistakenly.
7) Total of the sales journal Rs. 3416 has been calculated and recorded mistakenly as Rs. 3146.
8) Purchase invoice of Rs. 175 has been recorded correctly in the purchase journal but recorded as Rs. 157
in the creditors personal account.
9) The cheque of Rs. 59 received from trade receivable has been dishonored. This has been recorded
under the ‘cash paid to creditors ‘column in the cash payment journal. However, this has been correctly
entered in the debtor’s personal account.
Required,
• Prepare the revised debtors/ Creditors control accounts.
• Do the adjustments to correct the List of balances in the sales and purchase ledger.
Exercise No 2:
At the end of the year 31.12.2015 Kasun Pvt limited company had following amounts in the purchase ledger
control account.
Credit balance at 01.01.2015 35,000
Debit balance at 31.12.2015 500
Credit purchases 275,000
Discounts received 1,000
Cash paid to trade payable 243,000
Return Outward 2,500
The cash paid by trade payables 200
Interest charged by trade payables 3,000
Balance transferred from sales ledger 850
Debit balance at 31.12.2015 650
Balance of the control account did not agree with the list of balances in the purchase ledger. At the end of
the year 31.12.2015. following errors have been revealed.
1) Total of the purchase journal Rs. 500 has been undercalculated.
2) Credit balance of Rs. 250 has been omitted from the list of balances.
3) Discount received of Rs. 350 has been correctly recorded in the discount column of cash payment
journal but no entry in the creditors personal account.
4) Rs. 780 of invoice in the purchase journal has been recorded in the creditors personal account as Rs.
870.
5) Goods returned the suppliers of Rs. 850 has been correctly entered in the creditor’s account but as Rs.
1850 in the control account.
Required,
The control account before adjusting the above errors.
The control account with the adjustment of correcting the errors.
The reconciliation statement to compare the balance in adjusted control account with the List of balances.
Exercise No 3:
Purchase ledger of the Asoka’s company had following balances.
Supplier 01.01.2020 (Rs.) 31.12.2020 (Rs.)
Nalaka 10,000 5,000
Kumara - 10,000
Tharindu - 37,000
Amal 50,000 70,000
At beginning of the year 01.01.2020 the list of balances in the purchase ledger agreed with the balance in the
creditors control account. However, they did not match with each other at end of the year 31.12.2020.
With refers to further investigation it has revealed that the creditors control account has been prepared
correctly but some of the transactions have not been recorded in the purchase ledger.
Credit purchases, return outwards and cash paid to trade payables during the year can be listed as follows.
Supplier Credit Return Cash paid (Rs.)
purchase (Rs.) outward (Rs.)
Nalaka 50,000 5,000 Opening balance and net purchases of the year
Kumara 100,000 - The total amount payable after deducting 10% of cash
discount.
Tharindu 80,000 (this listed 2,000 50% of annual net purchases
price will be
subjected to 10%
of trade discount)
Amal 78,000 8,000 Opening balance
Required,
1) Creditors control account of the year which is in the general ledger.
2) The reconciliation statement to compare the list of balances with balance in the control account for
the year ended at 31.12.2020.
Exercise No 4:
Ameen started his new business on 01.01.2016 and the transactions which occurred during the year are as
follows.
Summary of Sales ledger (amounts in Rs. 000)
Customer Sales Discount allowed Cash received Balance as at 31.12.2016
Amal 1,600 160 660 780
Kamal 900 90 590 220
Sumal 500 - - 500
Total 3,000 250 1,250 1,500
Summary of purchase ledger (amounts in Rs. 000)
Supplier Purchases Discount received Cash paid Balance as at 31.12.2016
Shama 1,800 120 530 550
Maala 800 80 650 70
Priyanka 400 - - 400
Total 2,400 200 1,180 1,020
Additional information:
At end of the year 31.12.2016 the list of balances in the sales and purchase ledgers did not agree with the
balances in control accounts. Following errors have been revealed from investigations.
1) Total of the sales journal has been recorded in the control account and sales account as Rs. 300,000.
2) Discounts given to trade receivables have been debited to the debtors control account but correctly
recorded in the discount allowed account.
3) Total of the purchase journal has been recorded in the creditors control account and purchase account
as Rs.4200,000.
4) The goods worth Rs. 20,000 have been returned to Priyanka. This has not been recorded in her account
in the purchase ledger but correctly debited to the creditors control account.
Required,
1) Debtors control account for the year ended 31.12.2016 before adjustment to the above errors.
2) Creditors control account for the year ended 31.12.2016 after adjustments to the above errors.
Notes
