Day: May 29, 2024

Alex plc only buys inventories on credit.

At the end of May 2023, the payables control account and the list of payables ledger balances fail to agree.

An invoice of £807 from Lucy has been recorded as a credit note in the purchase daybook.

In the payables control account reconciliation both the control account balance and the list balances should be?

Select ONE answer:

1. Reduced by £807
2. Reduced by £1,614
3. Increased by £807
4. Increased by £1,614

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £807 should have been credited to payables, but instead it was debited to payables. Both the control account and the memorandum ledger should be credited with £807, to correct the error, and £807 again to record the invoice, ie increase both by (2 x £807) = £1,614

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