A difference between the sales ledger control account and the total of individual customer balances may arise when a transaction is recorded in the control account but omitted from the personal accounts. Which transaction is most likely to cause this difference?
Correct answer: C. A discount allowed recorded only in the control account
- A. A credit sale recorded in both ledgers
- B. A cash receipt recorded in both ledgers
- C. A discount allowed recorded only in the control account
- D. A balance brought forward recorded in both ledgers
Explanation
If discount allowed is entered in the control account but omitted from the relevant customer account, the two totals will differ. Transactions recorded consistently in both records do not create this reconciliation difference.
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About Bank Reconciliation and Control Accounts
Bank reconciliation explains differences between the cash book and bank statement through unpresented cheques, outstanding deposits, bank charges, direct payments, credited amounts and recording errors. Control accounts summarise receivables and payables ledgers, and their balances are reconciled with individual accounts to locate discrepancies.
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