PLB Exam - non balancing balances
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Now, like many of you I am doing the lovley PLB in oh two weeks. I have done a couple of Past papers, and couldn't get the balance to balance. I have read here a couple of times that it is OK to use a suspense account for times like these, but when I went back to check my last set of answers, NEITHER the debit nor the credit side had the correct amount in it. Surely a suspense account in situations such as these are... well... pointless?! :?
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Re:PLB Exam - non balancing balances
Well the suspense account would only be used in the exam to show that you know that you need to make it balance. In reality, the suspense would be investigated, to find the origin of the errornos figure0 -
Re:PLB Exam - non balancing balances
Yes, that makes sense, but if the 'bottom line' of both columns should be 100,000 and I have say, 90,000 and 80,000 the use of a 10,000 balancing figure still won't be correct, as I am aiming for 100,000 rather than 90,000.
I guess if I use a suspense account with the wrong balancing figure it still shows that I know what a suspense account is!
I need to go and do more revision...0 -
Re:PLB Exam - non balancing balances
Ever heard of the pearls!
Debits
Purchases
Expenses
Assets
Credits
Revenue
Liablities
Sales
Heres a few tips:
at the start when bringing the balances forward
Credit customers: it means we gave them something therefore they are all debits. this in turn makes the sales ledger control a debit brought forward balance.
credit suppliers: someone gave us something there for they are creditors to us. making it a credit balance brought forward. This makes the Purchase Ledger Control account a credit balance.
An example of the control account layouts are as follows.
Sales Ledger Control.
Dr
Balance b/fwd
Sales
Cr
Discount Allowed
Payments Made (cash book)
Sales Returned.
Balance c/fwd.
Purchase Ledger is the opposite way round to this.
Going back to the Pearls theory i will provide a list of the common mistakes that often happen on the trial balance.
Loan from bank is a liability making it a credit.
Capital is always a credit.
Purchases returned are credits.
Purchases are a debit.
Purchase Ledger Control is a Credit.
Sales been the opposite.
Sales ledger control the opposiite aswell.
Motor vehicles is an asset making it a debit
but Motor Vehicle expenses is an expense making it a debit
Now onto the awful topic of VAT.
The balance b/fwd is usally a Credit Balance. I will state which side.
For a purchase Ledger:
DR
Purchases
Bal c/fwd
CR
Bal b/fwd
Purchase Returns
Discount Recieved
Payments Made
Sales ledger is exactly the opposite.
A few More tips:
The bank on the trial balance is the cash book. dont forget to finish the balancing off. dont forget to BRING IT DOWN.
In regards to the cash book dont forget to ADD the things that are in. All the things on debit side need their credits entering and all the things on the credit side need there debits entering.
EVERY DEBIT HAS AN EQUAL AND OPPOSITE DEBIT
The Discount allowed or Recieved column is just a reminder that you need to add that to the correct T account. DO NOT adjust the total paid or banked.
If you alter one of the subsidiary ledgers and the Discount Allowed or Recieved account dont forget to put it into the Control Accounts.
In general do not panic, if your mind goes blank in the exam simply write pearls down or even better think in 'Nodddy terms' (am i giving something away, credit or recieving something, debit)
In the exam read through the whole exam first before even attempting to start.
You do not need to do it in order. you can it anyway you like aslong as you attempt every answer.
Always calculate the Nett figure less all discounts (trade, cash, settlement etc) first then work out the V.A.T Afterwards.
If you have a net figure times it by 1.175 to get the gross figure.
if you want to work out the vat on a gross figure its
Gross figure * 7 /47
Vat payable = output - input
SECTION 2
Questions 2.9 through to 2.10
Recconcilliations.
2.9
If the difference between the two ledgers is not one of the values in either ledger then you have done something wrong go back and check the ledger which you wrote out.
2.10
Check that the opening balances match. if they dont check that the first few bankings and payments add up to make the brought forward you have been given.
Tick all the Bankings that have been given to you and add all the other ones of the bank statement and tick them. Then balance off.
Overleaf ususally add the o/s receipts together then add that to the balance at the bottom of the bank statement then add together the payments and take that away from the subtotal of bank statement plus bankings.
eg.
balance as per statement 100
add: o/s receipts 50
150
less: o/s payments 100
50
Balance as per Cashbook 50
Hope all of this helps you.
I just did a mock exam i got a straught pass because i followed the rules laid above.
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Re:PLB Exam - non balancing balances
Thank you, a thousand times thank you. That was really kind of you to do all that.The bank on the trial balance is the cash book.
I think this bit really threw me in the practice paper that I did, as I am not used to that where I work. I really need to get that in my head. Also I screwed up the VAT - I put it in the susidiary ledgers as well.
Thanks so much. :!:0