Mock Exam Question Help level 2 bookeeping

Registered Posts: 10
edited December 2018
Hi guys,

I was wondering if anyone could provide an easy method/ explanation to working out the below question? This type of question keeps coming up in practice exams so want to make sure I fully understand how it should it come up in the real assessment.

A cheque for £1567 has been received from a customer which they incorrectly state is in full settlement of their account at 28th feb. the customers account in the sales ledger is shown below:

dr

1/2 balance b/f - £1349
8/2 invoice 1223 - £ 270
17/2 Invoice 1250 - £1208
23/2 Invoice 1268 - £391
28/2 Invoice 1281 - £3420

cr

1/2 CN88 - £480
4/2 Bank - £869
13/2 CN 91 - £32
25/2 CN 96 - £110

which three of the above transactions are outstanding?

Comments

• LiverpoolAAT Student, AATQB Posts: 32
edited December 2018
Hello L3X,

Allow me to explain this for you.

On the debit side you have the amounts of:
1349
270
1208
391
3420

On the credit side you have the amounts of:
480
869
32
110.

You have received a payment of £1567 in alleged full settlement of the account. So you add this to the credit side as it is a payment received.

On the credit side, you now have:
480
869
32
110
1567.

You need to balance these off. Adding up the totals of the debit side gives you 6638 which you add to the totals of both sides (debit and credit), as this is the highest total. Minus all of the credit amounts (as it is the lower total) and you should still have an amount of 3580 which is owed to you.

With a bit of trial and error, you can work out what amounts to 3580. Here, if you go to the debit side (where you add) and add 3420 and 270 and "minus" from the credit side the amount of 110, should give you 3580.

Therefore, the three transactions as the answer are: Invoice 1223 (£270), Invoice 1281 (£3420) and Credit Note 96 (£110).
AAT
Level 2 - Foundation Certificate in Accounting - Aug 2019
Level 3 - Advanced Diploma in Accounting - Aug 2020
Next exam: Level 4 - Credit Management 17th Dec 2020
• Registered Posts: 10
Thank you so much @LeapyUK that has helped a lot to understand the method. I wonder if you could also help me with this question as well?

These are the totals of the cashbook at the end of the month:

Dr
Cash - £854
Bank - £16370
VAT - £0
Trade receivables - £16370
Cash sales - £0

Cr
Cash - £854
Bank - £16370
VAT - £59
Trade payables - £9942
Cash purchases - £295

What will be the entrees in the general ledger?

Table titles are: Account name, Amount £, Debit, Credit

Thanks
• LiverpoolAAT Student, AATQB Posts: 32
Happy to help L3X.

So, lets eliminate what is balanced (your cash and bank totals are same on both sides and we don't need to look at those) and what has a zero figure (therefore doesn't need to be entered into the general ledger).

Dr
Cash - £854
Bank - £16370
VAT - £0
Trade Receivables - £16370
Cash Sales - £0

(All entries on the debit side of the cash book will be entered into the credit side of the general ledger).

Cr
Cash - £854
Bank - £16370
VAT - £59
Trade Payables - £9942
Cash Purchases - £295

(All entries on the credit side of the cash book will be entered into the debit side of the general ledger).

So here you are left with 4 entries that need to go into the general ledger. Remember, these are totals.

Trade receivables are customers, therefore will be entered into the Sales Ledger Control Account on the opposite side. (Remember these are totals, not subsidiary).

VAT of £59 is on the credit side of the cash book so needs to be entered into the VAT account in the General Ledger on the opposite side.

Trade payables are suppliers, therefore will be entered into the Purchases Ledger Control Account on the opposite side.

Cash Purchases of £295 is on the credit side of the cash book so needs to be entered into the Cash Purchases account in the General Ledger on the opposite side.

Answers:

SLCA - £16370 - Credit
VAT - £59 - Debit
PLCA - £9942 - Debit
Cash Purchases - £295 - Debit.

Hope this helps!
AAT
Level 2 - Foundation Certificate in Accounting - Aug 2019
Level 3 - Advanced Diploma in Accounting - Aug 2020
Next exam: Level 4 - Credit Management 17th Dec 2020
• Registered Posts: 10
Hi @LeapyUK this does help thanks a lot
• Registered Posts: 10
Hi @LeapyUK I wonder if you might be able to help me with this question as well? I'm not sure why but it seems to be the cashbook questions that throw me off:

The following transactions all took place on 30 September 20XX and have been entered into the cash book, as shown below.
No entries have yet been made in the ledgers.

Dr
Balance b/f 7680
J Bentham LTD - Discounts- 200, bank - £5500

Cr
Wages - 2350
Rent - 2400
Advertising - VAT - 240 - bank -1440
Balance c/d - 6990

What will be the entries in the sales ledger?

What will be the entries in the general ledger?

Thanks
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