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Control Account 3

Malik's sales ledger control account for July 2023 showed discrepancies when compared to the total of customer account balances. Several errors were identified, including undercasting, overcasting, and incorrect postings, which contributed to the imbalance. The document also requests the preparation of a corrected sales ledger control account and a schedule of corrected balances, along with a discussion of limitations in preparing control accounts.

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Farhan Jehangir
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62 views3 pages

Control Account 3

Malik's sales ledger control account for July 2023 showed discrepancies when compared to the total of customer account balances. Several errors were identified, including undercasting, overcasting, and incorrect postings, which contributed to the imbalance. The document also requests the preparation of a corrected sales ledger control account and a schedule of corrected balances, along with a discussion of limitations in preparing control accounts.

Uploaded by

Farhan Jehangir
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

10

3 Malik prepared a sales ledger control account for July 2023. However, the balance of the control
account did not agree with the total of customers’ account balances in the sales ledger.

He provided the following information.

$
At 1 July 2023
Sales ledger control account balance 76 250
For the month of July 2023
Contra purchases ledger 420
Sales journal 69 634
Cash book: customer cheques dishonoured 22
Cash book: discounts allowed 892
Journal: irrecoverable debts 410
Cash book: receipts from credit customers 74 118
Sales returns journal 2 090

The following errors were discovered which accounted for the difference.

1 The balance of a sales ledger customer’s account had been undercast by $300.

2 The total of the sales returns journal had been overcast by $580.

3 A journal entry to write off a customer account balance of $95 as irrecoverable had been
correctly entered in the general ledger but had been posted to the debit side of the customer’s
account.

4 A cheque received from a customer, $320, had been correctly entered in the cash book but
had been posted to the debit side of the customer’s account as $230.

5 A further dishonoured cheque from a customer, $215, had not been entered in the cash book
but had been correctly entered in the customer’s account.

The list of customer account balances extracted from the sales ledger totalled $69 211.

© UCLES 2023 9706/22/O/N/23


11

(a) Prepare the sales ledger control account for the month of July 2023, taking into account the
errors discovered. Dates are not required.

Sales ledger control account

Details $ Details $

[9]

(b) Prepare a schedule of the corrected sales ledger account balances.

Increase Decrease Total


$ $ $

Per original list 69 211

Corrected balances

[4]

© UCLES 2023 9706/22/O/N/23 [Turn over


12

(c) State two limitations of preparing a control account.

1 ................................................................................................................................................

...................................................................................................................................................

2 ................................................................................................................................................

...................................................................................................................................................
[2]

[Total: 15]

© UCLES 2023 9706/22/O/N/23

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