Errors Highlighted by Control Account Reconciliation

Reason of disagreement in control Account balance and list of ledger balances Error in casting totals in daybooks Error in posting totals from daybooks Errors & omissions in control/subsidiary accounts. Following errors can be highlighted by performing control account reconciliation. Error of Omission Transposition error Error of Principle Error of Original Entry Complete Reversal of…

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Receivable/Payable Ledger Control Accounts Reconciliations

Involves comparing the balance of receivable/payable control account to the sum of the balances as per list of receivable/payable ledger. Steps to reconcile control accounts balances with the list of ledger balances Step – 1 Adjust errors of control a/c in Receivable/Payable Control Account by recording debits or credits. Step – 2 Adjust errors of…

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Preparation of Receivable/Payable Ledger Control Accounts

1     Receivable Ledger Control Account Following are the contents of receivable ledger control account. Debit Records (DR) Balance b/d Sales made on credit Bank (Dishonored Cheques) Interest charged Legal expenses charged Credit Records (CR) Sales return Cash received from customer Cash discount obtained by customer Irrecoverable debts Advance received from customer Allowance for damaged goods…

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Purpose of Control Accounts in Double Entry Accounting

Types of Control Accounts 1. Receivable Control Account; 2. Payable Control Account Control accounts represents: A total value of a number of separate receivable/payable balances. To check arithmetical accuracy of sales/purchase accounting system To facilitate in locating errors in sales/purchase accounting system To provide instant balance of receivables/payables for final account preparation Control accounts are…

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Recording Cash Transactions in Ledger Accounts

Cash transactions are first recorded in cash day books. Cash receipts are recorded at receipt side and cash payments are recorded at payment side. At cash receipt side, commonly following transactions are recorded: Cash sales Purchase return Other income received in cash At cash payment side, commonly following transactions are recorded: Cash purchases Sales return…

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Accounting for Discounts Allowed and Received

There are two types of discounts: Cash discounts Trade discounts 1       Cash Discounts Cash discount is also called credit discount. Cash discounts are given to encourage early payment by customers. Cash discounts are treated as finance cost. Following are the accounting entries for cash discount: Vendor Account Receivable           DR Sales                                              CR (To record credit sales…

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Calculation of Sales Tax on Transactions

Sales tax is charged on transactions as follows: Inclusive of sales tax transactions Exclusive of sales tax transactions 1       Inclusive Of Sales Tax Transactions In inclusive of sales tax transactions, List price offered to customers for goods or services includes both sales revenue and sales tax. Customers do not have to pay over and above…

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Recording Sale & Purchase Transactions

1       Recording Sales Transactions Sales can be made on cash or on credit. Cash sales involves advance payment or immediate exchange of cash in exchange of goods or service whereas credit sales involve payment for goods or service after the date of delivery, such as 30 to 90 days. 1.1     Cash Sales Recording cash sales…

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MURTAZA’S STUDY PLANNER FOR ACCA STUDENTS

1          Determine number of days available Formula: Idle time can be incurred due to sickness, computer crash, social events etc. It depends on your daily activities and environment. I recommend you to make a printed copy to read when computer is not available. 2          Allocation of number of days available to exams Formula: Number of…

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