Control Account Reconciliations Examples

Control account reconciliations
Practice Questions
1.
J Co prepares monthly receivables' and payables' ledger control accounts. At 1 November 20X5 the
following balances existed in the entity’s records.
Dr Cr
$ $
Receivables' ledger control account 54,000 1,000
Payables' ledger control account 200 43,000
The following information was extracted in November 2005 from the entity's records:
$
Credit sales 251,000
Cash sales 34,000
Credit purchases 77,000
Cash purchases 29,000
Credit sales returns 11,000
Credit purchases returns 3,000
Amounts received from credit customers 242,000
Dishonoured cheques 500
Amounts paid to credit suppliers 74,000
Cash discounts received 2,000
Irrecoverable debts written off 4,000
Increase in allowance for receivables 1,200
Interest charged to customers 1,400
Contra settlements 800
At 30 November 20X5 the balances in the Receivables’ and Payables’ ledgers, as extracted, totalled:
Dr Cr
$ $
Receivables’ ledger balances To be calculated 2,000
Payables’ ledger balances 200 To be calculated
Required:
Prepare the receivables' ledger control account and the payables' ledger control account for J Co for the
month of November 20X5 to determine the closing debit and closing credit balances on the receivables'
ledger control account and payables' ledger control account respectively?
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2.
Suggest reasons why there might be a difference between the balance on the receivables’ ledger control
account and the total of the list of accounts receivable ledger balances?
3.
A’s payables’ ledger control account is an integral part of the double entry system. Individual ledger
account balances are listed and totalled on a monthly basis, and reconciled to the control account balance.
Information for the month of March is as follows:
1. Individual ledger account balances at 31 March have been listed out and totalled $19,766.
2. The payables’ ledger control account balance at 31 March is $21,832.
3. Upon further examination the following errors are discovered:
➢ The total of discount received for the month, amounting to $1,715, has not been entered in the
control account but has been entered in the individual ledger accounts.
➢ On listing-out, an individual credit balance of $205 has been incorrectly treated as a debit.
➢ A petty cash payment to a supplier amounting to $63 has been correctly treated in the control
account, but no entry has been made in the supplier’s individual ledger account.
➢ The purchases day book total for March has been undercast (understated) by $2,000.
➢ Contras (set-offs) with the receivables’ ledger, amounting in total to $2,004, have been correctly
treated in the individual ledger accounts but no entry has been made in the control account.
Required:
i. Prepare the part of the payables’ ledger control account reflecting the above information?
ii. Prepare a statement reconciling the original total of the individual balances with the corrected
balance on the control account?
4.
R is a business selling umbrellas branded with corporate logos. The umbrellas are sold on credit, rather
than for cash. The accountant is carrying out a reconciliation of the receivables’ ledger control account
balance, which is $172,000 to the total of the balances on the individual accounts in the receivables’
ledger, which is $176,134.
The following has been found:
i. A contra item of $1,500 has not been entered in the receivables’ ledger control account.
ii. A cheque for $555 from a customer has been dishonoured. The correct double entry has been
posted but the individual accounts have not been updated.
iii. A payment of $322 from a customer has incorrectly been entered in the accounts receivable
ledger as $233.
iv. Cash received of $800 has been debited to the individual customer’s account in the accounts
receivable ledger.
v. Total credit sales of $4,500 to a large accountancy firm, C & C have been posted correctly to the
ledger account but not recorded in the control account.
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Required:
Correct the receivables’ ledger control account and reconcile this to the sum total of the individual
accounts in the accounts receivable ledger.
5.
T received a statement from a supplier, C, showing a balance of $14,810. T’s Payables’ ledger shows a
balance due to C of $10,000. Investigation reveals the following:
i. Cash paid to C of $4,080 has not been recorded by C.

ii. T’s recorded the fact that a $40 cash discount was not allowed by C, but forgot to record this in
the payables’ ledger.
What discrepancy remains between T and C’s records after allowing for these items?
A. $9,930
B. $9,850
C. $770
D. $690
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Control account reconciliations

Information for the month of March is as follows:

The following has been found:

i. Cash paid to C of $4,080 has not been recorded by C.

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