6.11

(a) Aries Ltd maintains a creditors ledger control account in its general ledger as part of its double entry system. Individual accounts for suppliers are maintained on a memorandum basis in a separate creditors ledger.

The following totals are available for the financial year ended 30 November 1990:

£

Discounts received 3,608 Cash and cheques paid to suppliers

(per cash book) 231,570 Set-offs to sales ledger control account 818 Credit purchases 249,560 Returns outwards 4,564 The audited total for creditors as at 1 December 1989 was £45,870.

Reconstruct the creditors ledger control account for the year ended 30 November 1990.

(8 marks)

(b) The total of the balances on the individual creditors accounts as at 30 November 1990 was £51,120. When the records were checked the following errors were discovered:

1 An invoice for £1,125 which was correctly entered into the purchases book has not been posted to the individual supplier’s account.

2 Another invoice for £1,850 has been omitted from the purchases book.

3 A credit note from a supplier for £870 has been completely omitted from the records.

4 During the year ended 30 November 1990 petty cash payments to suppliers totalled £625. These have been correctly recorded in the petty cash book and posted to the individual suppliers accounts but no other entry has been made.

5 The total of the individual creditors balances as at 30 November 1990 has been understated by £2,000.

Prepare a clear calculation of (i) The corrected balance on the creditors ledger control account; and (6 marks)
(ii) The corrected total of the balances on the individual creditors accounts as at 30 November 1990.
(6 marks)
(Total 20 marks)
(AAT Preliminary, December 1990)