Name of teacher : Leandre Ab'eka
For further information you can contact me via email at : leandreabeka1@gmail.com
Introduction
Good day learners, Today we will start with the a new topic called Creditors Reconciliation.
In grade 10 you have dealt with bank reconciliation and the purpose of bank reconciliation is to reconcile the bank account balance in the entity's books and the bank statement of the financial institution.
Creditors reconciliation is when a business receives a statement of account from creditors which indicate the transactions that took place. This statement needs to be compared with the creditors account in the creditors ledger to ensure that all transactions recorded on it are correct.
What we will do today is looking at omissions/errors in the creditors account and compare it with the creditors statement, in the video the will be shown on what you can expect and how to correct the errors in the creditors reconciliation statement.
Task
Task 1: Creditors Reconciliation (20 marks)
Answer all the questions.
Question 1: Theory (10 marks)
1.1 What is a creditor?
1.2 Is a creditor an asset or a liability? Explain your answer.
1.3 What is the purpose of doing a creditors reconciliation?
1.4 If a business buys goods on credit which accounts does it effect?
1.5 Name 2 control measures that can be applied maintain control over creditors.
Question 2: Do a creditors ledger account of King Traders with the given information (10 marks)
1.King Traders shows a balance of R23 540 on the 1st of March 2020.
2. An invoice received for R3500 from AB Suppliers was incorrectly recorded as a debit note in the creditors ledger of King Traders. Only enter the correction of the error in the ledger account.
3. A cash payment of R2750 was made to AB Suppliers and has not yet been recorded in the creditors control account of King Traders.
4. An EFT payment was made to AB Suppliers for R1500,King Traders assumed that a 10% discount was allowed and entered it in their books.King Traders should correct the error as no discount was allowed due to late payment.
5. King Traders send goods back to AB Suppliers with an amount of R5760 due to incorrect items supplied, it was not yet recorded in the books of King Traders.
Process
Step 1
Watch the video provided to you to answer questions of the task
Step 2
Do the calculations on a seperate page to answer Question 2.
Evaluation
Grade 11 Accounting: Creditors Reconciliation
| Question | Structure | Mark Achieved | Total Mark |
| 1 | Theory | 10 | |
| 2 | Calculations | 10 | |
| Total | 20 |
Conclusion
In conclusion:
We have learnt the purpose of doing a creditors reconciliation, how to correct mistakes and do the correct entry in the creditors control account.
For our next lesson you are required to go again through the previous videos and than listens to the next video so we can go further by doing the Reconciliation Statement.