FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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anc x + 6 / 7 100% + | 回の | Question 3 The trial balance of Fruit Ltd. as at 31 December 2020 failed to balance. In order to locate the errors, it was decided to prepare purchases and sales ledger control accounts. The following information is available: € 1 Jan 2020 Purchases ledger balances Sales ledger balances 37,760 42,900 Totals for the year 2020 Purchases day book Sales day book Returns outwards day book Returns inwards day book Cheques paid to suppliers Cash paid to suppliers Cheques received from customers Cash received from customers Discounts allowed Discounts received 432,750 659,000 45,678 24,300 343,000 8,750 597,000 6,750 61,000 42,750 31 Dec 2020: The list of balances from the purchases ledger shows a total of €35,750 and that from the sales ledger a total of €12,850. Requirements: a) Prepare the purchase ledger (account payables) control account and the sales ledger (account receivables) control account. b) State where any one error has been made, and provide an example of what could have caused that error. c) Having reviewed the control accounts you prepared in a) above, Hannah, the owner of Fruit Ltd. asks you why you would prepare such accounts. Write a memo to Hannah explaining what a control account is, how it relates to personal accounts and double entry book-keeping, and the key benefits of maintaining control accounts. tv W
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Transcribed Image Text:anc x + 6 / 7 100% + | 回の | Question 3 The trial balance of Fruit Ltd. as at 31 December 2020 failed to balance. In order to locate the errors, it was decided to prepare purchases and sales ledger control accounts. The following information is available: € 1 Jan 2020 Purchases ledger balances Sales ledger balances 37,760 42,900 Totals for the year 2020 Purchases day book Sales day book Returns outwards day book Returns inwards day book Cheques paid to suppliers Cash paid to suppliers Cheques received from customers Cash received from customers Discounts allowed Discounts received 432,750 659,000 45,678 24,300 343,000 8,750 597,000 6,750 61,000 42,750 31 Dec 2020: The list of balances from the purchases ledger shows a total of €35,750 and that from the sales ledger a total of €12,850. Requirements: a) Prepare the purchase ledger (account payables) control account and the sales ledger (account receivables) control account. b) State where any one error has been made, and provide an example of what could have caused that error. c) Having reviewed the control accounts you prepared in a) above, Hannah, the owner of Fruit Ltd. asks you why you would prepare such accounts. Write a memo to Hannah explaining what a control account is, how it relates to personal accounts and double entry book-keeping, and the key benefits of maintaining control accounts. tv W
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