Accounting - Grade 11 - Lesson 7 Creditors Reconciliation

A creditor's ledger calculates the total value owed by the debtor

• True

• False

A debtor receives a/an _____ stating the amount owed to the creditor after a credit purchase.

A debtor returns trading stock to a supplier. The creditor will issue a/an _____ as evidence that the credit sale was reversed.

After a debtor returns trading stock and the creditor has reversed the sale, a/an _____ will be issued to the creditor as evidence that the purchase was reversed.

Match the source document with it's corresponding effect on the books of the business.

• Debtors Increase

• Invoice Received

• Creditors Decrease

• Credit Note

• Debtors Decrease

• Debit note

• Creditors Increase

• Invoice Issued

Match the ledger entries to the correct credit transaction.

• Trading stock bought on credit returned to supplier

• Dr. Creditors' Control

  Cr. Trading Stock

• Received value owed from credit sales

• Dr. Debtors' Control

  Cr. Sales

  Dr. Cost of Sales

  Cr. Trading Stock

• Goods purchased on credit from a supplier

• Dr. Bank

  Cr. Debtors Control

• Paid creditor value owed

• Dr. Trading Stock

  Cr. Creditors' Control

• Sold trading stock on credit to a debtor

• Dr. Creditors' Control

  Cr. Bank

You are given the creditors ledger of ABC Traders in the books of the debtor, XYZ Traders.

Calculate the value owed to ABC Traders.

• 17882

• 55382

• 28562

• 16558

You are given the debtors ledger of XYZ Traders in the books of the creditor, ABC Traders. Calculate the value owed to ABC Traders.  

• 40669

• 26279

• 5731

• 34031

You have been given the creditors ledger of Mr L. Hamilton as shown in the books of the debtor, Mr S. Vettel. Read through the transactions below and identify the days that were incorrectly recorded by Mr Vettel’s bookkeeper.  Mr Vettel uses an 80% mark up on all goods.

IMPORTANT: Keep your calculations for the next question

 

Transactions

Day 1:   Trading stock purchased on credit from L. Hamilton, R4560 (Invoice 575)

Day 5:   S. Vettel made payment to L. Hamilton, R13 400 (EFT 114)

Day 7:   Goods originally purchased on credit, were returned to Mr Hamilton. Mr Vettel had planned on selling the returned goods for R11 160. Debit note 156D was issued.

Day 8:   Trading stock purchased on credit from L. Hamilton, R3200. A trade discount of 15% has not been taken into account. (Invoice 592)

Day 16:   S. Vettel made payment for 50% of the value owed to Mr Hamilton (EFT 143)

• There are mistakes on days 1, 8 and 16

• There are mistakes on day 7 and day 8

• There are mistakes on days 1, 7 and 16

• There are mistakes on days 5, 8 and 16

You have been given the creditors ledger of Mr L. Hamilton as shown in the books of the debtor, Mr S. Vettel. Use your workings from the previous question to calculate the correct value owed to Mr L. Hamilton  

Transactions

Day 1:   Trading stock purchased on credit from L. Hamilton, R4560 (Invoice 575)

Day 5:   S. Vettel made payment to L. Hamilton, R13 400 (EFT 114)

Day 7:   Goods originally purchased on credit, were returned to Mr Hamilton. Mr Vettel had planned on selling the returned goods for R11 160. Debit note 156D was issued.

Day 8:   Trading stock purchased on credit from L. Hamilton, R3200. A trade discount of 15% has not been taken into account. (Invoice 592)

Day 16:   S. Vettel made payment for 50% of the value owed to Mr Hamilton (EFT 143)

• Mr Vettel owes Mr Hamilton R4 580

• Mr Vettel owes Mr Hamilton R4 340

• Mr Vettel owes Mr Hamilton R7 440

• Mr Vettel owes Mr Hamilton R1 620