Question

On 30 June 1999, Donald listed the balances contained in his sales ledger. These balances totaled $518040, but on the same date, the balance of the sales ledger control account was $18910. After investigation, the following errors were found:

a. A debtor balance of $5190 had been counted in total credit sales but had not been posted to the customer's account.
b. Discount allowed of $60 had been entered in the cash book but not in the customer's account.
c. Return inward journal was overcast by $120.
d. Returns of $170 from B-Peter had not been recorded in the books.
e. John was both a customer and a supplier. His purchases ledger balance of $260 has been set-off against his sales ledger balance in the control account, but nothing had been recorded in the customer's account.
f. Sales day book had been overcast by $460.
g. Debtor account was charged with $20 interest that was not recorded in the control account.
h. M-Charles returned goods worth $280; the sum was recorded as $820 in his account.
i. A debt of $110 had proven bad, but no entry had been passed in the books.
j. Discount allowed of $80 had posted to the debit side of M-Druid's account.

Answer 1

To reconcile discrepancies in Donald's sales ledger, errors such as unposted debtor balances, incorrect journal entries, and misrecorded transactions should be corrected. Separately, a bank’s T-account includes reserves, government bonds, and loans made as assets, and deposits as liabilities, with net worth being the difference between assets and liabilities.

Step-by-step explanation:

Sales Ledger Correction and Bank's T-account Balance Sheet

The subject here is Business, particularly focusing on accounting practices and principles. Correcting the sales ledger involves adjusting for errors found, which impacts the reconciled balances of the sales ledger and the control account. For instance, a debtor balance not posted would need to be corrected, along with adjustments for overcast journals, unrecorded returns, and discounts erroneously posted.

On the other hand, setting up a T-account balance sheet for a bank involves categorizing assets and liabilities and calculating the net worth. Here, assets would include reserves, government bonds, and loans made, while liabilities are primarily the bank’s deposits. The net worth is found by subtracting the liabilities from the assets.