A company's sales ledger control account shows a balance of £48,200. The total of the list of individual receivables ledger balances is £47,860. Which of these could explain the £340 difference?
Answer and explanation
Correct answer: A. A sales invoice for £340 was entered in the sales day book but not posted to the customer's account
- Step 1: The control account is £340 higher than the sum of individual accounts.
- Step 2: The control account is built from the day book totals, so an invoice in the day book but missing from the personal ledger would make the list £340 lower.
- Step 3: Errors made consistently in both places do not create a difference.
Answer
A sales invoice for £340 was entered in the sales day book but not posted to the customer's account.
Why not the others: If posted to both, the difference would not arise. A correct entry in both ledgers would leave the two balances in agreement. The control account and the list of balances would still both include the £340, so no difference would appear.
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