Difference of Payable Ledger Account (video below)
ABC received a statement from one of its suppliers, XYZ, showing a balance due of $7,960. The amount due according to the payables ledger account of XYZ in ABC’s records was only $460.
Comparison of the statement and the ledger account revealed the following differences:
- A cheque sent by ABC for $540 has not been allowed for in XYZ’s statement.
- XYZ has not allowed for goods returned by ABC $360.
- ABC made a contra entry, reducing the amount due to XYZ by $6,400, for a balance due from XYZ in ABC’s receivables ledger. No such entry has been made in XYZ’s records.
What difference remains between the two companies’ records after adjusting for these items?
Answer
| $ | |
| Balance per XYZ | 7,960 |
| Cheque not yet received | (540) |
| Goods returned | (360) |
| Contra entry | (6,400) |
| Revised balance per XYZ | 660 |
| Balance per ABC | (460) |
| Remaining difference | 200 |
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