Prepare a purchases ledger control account, Financial Accounting

Assignment Help:

Question:

The following information was extracted from the books of William Noel for the year ended 30 April 2009.
                                                                            Rs
Purchases Ledger Balance as at 1 May 2008    43120
Credit purchase for the year                             824 140
Credit purchases returns                                  12 400
Cheques paid to creditors                                 745 980
Cash purchases                                                 8 940
Discount received on credit purchases               31 400
Credit balances transferred to sales ledger accounts 5 210

The total of the balances in Noel's purchases ledger amounts to Rs 67 660, which does not agree with the closing balance in the Control account.

The following errors were then discovered:

1. Discount received had been overstated by Rs 1 000.
2. A credit purchases invoice for Rs 2 040 had been completely omitted from the books.
3. The purchases ledger account had been understated by Rs 100.
4. A credit balance of Rs 850 in the purchases ledger had been set off against a contra entry in the sales ledger, but no entry had been made in the control accounts.
5. A payment of Rs 1 450 had been debited to the creditor's account but was omitted from the bank account.
6. A credit balance of Rs 3 210 had been omitted from the list of creditors.

Required:

a. Prepare a Purchases Ledger Control Account for the year ended 30 April 2009.

b. Explain why it is useful to maintain a control account in respect of both trade receivables and trade payables.

c. Explain briefly how a contra entry might arise.


Related Discussions:- Prepare a purchases ledger control account

expected quarterly return, Common stocks A, B, C, and D had the following ...

Common stocks A, B, C, and D had the following quarterly returns. A B C D 0.07 0.05 0.07 0.12

What is reporting currency, 1. What accounting firm performed the audit of ...

1. What accounting firm performed the audit of Zetar's financial statement? 2. What is the address of the company's corporate headquarters? 3. What is the company's reporting

Money, if you inherited 45,000 today and invested all of it in a security t...

if you inherited 45,000 today and invested all of it in a security that paid a 7 percent rate of return how much would you have in 25 years

Stock exchange., #define stock exchange? mention the SEBI guideline pertain...

#define stock exchange? mention the SEBI guideline pertaining to the functioning of stock exchange? question..

What is the effect on g''s capital, Partners F and G receive an interest al...

Partners F and G receive an interest allowance of $10,000 and $15,000, respectively, and divide the remaining profits and losses in a 3:1 ratio. If the company sustained a net loss

Calculate the risk premium , Question: Zelo, Inc. stock has a beta of 1...

Question: Zelo, Inc. stock has a beta of 1.23. The risk-free rate of return is 4.5% and the market rate of return is 10%. What is the amount of the risk premium on Zelo stock?

Cost recovery deductions, On May 19, 2010, Kim placed in service a LIGHT VA...

On May 19, 2010, Kim placed in service a LIGHT VAN that cost $54,850. It is used 80% for business each year. What is the maximum cost recovery deduction available for the van in 20

What is the value of debt and equilty, Steinberg Corporation and Dietrich C...

Steinberg Corporation and Dietrich Corporation are identical firms except that Dietrich is more levered. Both companies will remain in business for one more year. The companies' ec

PARTNERSHIP, CHARACTERISTICS OF PARTNERSHIP

CHARACTERISTICS OF PARTNERSHIP

Public oversight board, Public Oversight Board (POB) - POB is an independen...

Public Oversight Board (POB) - POB is an independent oversight board, composed of public members that monitors and evaluates peer reviews conducted by SEC Practice Section (SECPS)

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd