Correction of Sales Ledger Errors

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
How are errors in the sales ledger corrected? I really should know but it's a while since I did this and I can't find anything in the textbooks. I've a question about this on the supplementary exercises for Unit Five so any help would be appreciated.

Chris

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Correction of Sales Ledger Errors

    Hi Chris,

    It depends what the error is really to how you tackle it. Here's some information, however if you need anymore chapter nine in the FTC book is on control account reconciliations.

    Procedures:
    • Determine the balance on the control a/c.
    • Total the individual balances in the subsidiary ledger.
    • Compare the two totals as they should agree.
    • If they don’t agree then the balance should be investigated and corrected.

    Reasons for Differences:
    • Errors in the casting of the day books. (SLCA and PLCA will be incorrect but the subsidiaries will be correct).
    • Transposition error. (Divisible by nine).
    • Contra entry hasn’t been recorded in all relevant a/c’s. I.e. Control a/c’s and subsidiary ledger a/c’s.
    • A balance has been omitted from the list of subsidiary ledger balances.
    • A balance in the subsidiary ledger has been included in the list of balances as a debit when it was a credit, or vice versa.

    Treatment of Differences:
    • The control a/c is adjusted for any errors affecting the control account.
    • The list of subsidiary ledger balances is adjusted for any errors that affect the list of individual balances.


    Hayley
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Correction of Sales Ledger Errors

    Thanks Hayley, that's helpful - especially the list of errors a reconciliation will pick up as that was part of the question too. It doesn't really answer my question though. I know the accounts should be adjusted it's how they are adjusted I don't know. Errors in the control accounts can be sorted out with a journal entry, but it's what you do with errors in the subsidiary ledgers that I've forgotten.

    Chris
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Correction of Sales Ledger Errors

    Thats ok. Well from what i can remember the subsidiary accounts aren't part of the double entry accounting system so all you need to do is add or minus the errors depending on which account they relate to.

    Hayley
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Correction of Sales Ledger Errors

    That's just what I needed to know, Hayley. Thanks again.

    Chris

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