Cred Control Answer Book

Accounting 1 Free State 2021
Creditor’s Reconciliations
QUESTION 1
1.1 CREDITORS' RECONCILIATION
1.1.1 Creditors' Ledger

Statement
Account of Thembeka
of Account from
Suppliers in the
Thembeka Suppliers
Books of Ekasi Traders
Balance 117 200 157 400
(a)
(b)
(c)
(d)
(e)
(f)
1.1.2 What should the owner say to Bradley regarding this incident? Explain
TWO points.
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QUESTION 2

2.1.1 CREDITORS' LEDGER:
STATEMENT OF
ACCOUNT OF MARITI
ACCOUNT
SUPPLIERS
Balance 147 820 145 060
(a)
(b)
(c)
(d)
(e)
(f)
13
2.1.2 The internal auditor insists that direct payments (EFTs) must be used to
pay suppliers.
Explain ONE reason to support his decision.
2
Explain ONE internal procedure to ensure control over this system.
2.1.3 Besides dismissing Vernon, provide ONE suggestion for action to be

taken against him.
Provide ONE suggestion to prevent this problem in future.

QUESTION 3
3.1 The bookkeeper, Litzie, says it is not necessary for her to prepare a
Creditors' Reconciliation Statement because the creditors send
monthly statements to the business anyway. What would you say to
her? State TWO points.
3.2
No. Creditors' Ledger of Statement of account
KZ Stores received from Valley Ltd
Balance 112 820 182 150
A – 9 000 – 9 000
16

3.3 3.3.1 Explain what action should be taken against J van Wyk. State
TWO points.
3.3.2 What must the business do to prevent a similar incident in

future? Explain THREE points.

4.1 QUESTION 4

CREDITORS' LEDGER
STATEMENT
Balance 110 170 111 600
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
14
4.2 State TWO internal control measures that the business can use to
prevent similar incidents from happening in future.

Accounting/P2 DBE/November 2020(2)
NSC
QUESTION 5
5.1.1 ACCOUNT OF
STATEMENT RECEIVED
METEOR SUPPLIERS IN
FROM METEOR
CREDITORS' LEDGER OF
SUPPLIERS
COMET TRADERS
Balance R10 705 R19 120
A
B
C
D
E
Final balance 9

UESTION 6
6.1 List the corrections that the bookkeeper must make to the Creditors’
Control Account in the General Ledger. If no entry is applicable, write
'NO ENTRY'.
Balance R160 300

A
B
C
D
E
F
G
Final balance
8
6.2 Prepare the correct Creditors’ List of balances on 30 June 2014.
Fourie Traders
(29 600
Faure Wholesalers
(96 500
Hlabiks Stores
(44 300
10

QUESTION 7
7.1
Creditors’Control
Adjustment No entry
Balance 58 270
10
7.2
CREDITORS’ LIST
Mango Traders (8 465
Serengeti Stores (5 123
Post Network (12 874
Serengeti Wholesalers (14 869
Riviria Distributors (21 119
11

QUESTION 8
Balance according Creditors control 31 105
Balance according to Creditors list 37 415

QUESTION 9
9.1 CREDITOR’S LEDGER

NO. STATEMENT BALANCE
ACCOUNT BALANCE
Balance 87 320 95 400
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
TOTAL 12
9.2 As an internal auditor, what advice would you offer the owner
regarding the purchase of goods through the business accounts?
Make reference to a GAAP principle in your explanation

QUESTION 10
10.1 Briefly explain how the preparation of a creditors’ reconciliation as an

internal control measure can assist the business in managing their
creditors effectively. Provide TWO points.
10.2 Use the table provided to indicate the changes that must be made in the
Creditors’ Control account and Creditors’ List in the books of Titanic
Traders to take into account the errors and omissions noted. Indicate the
increase or decrease with a (+) or (-) with each amount.
Creditors’ Control Creditors’ List
Provisional balance/total R 74 715 R32 595

A
B
C
D
E
10.3 State THREE internal control measures that the business can use to
prevent similar incidents from happening in future.

QUESTION 11
11.1 CREDITORS LEDGER

NO STATEMENT BALANCE
ACCOUNT BALANCE
Balance 95 160 143 460
i)
ii)
iii)
iv)
v)
vi)
vii)
TOTAL 11
11.2 Refer to Information (vi):

Provide TWO possible actions that can be taken against M. Rice.
4
Explain TWO internal control measures that the business can use to
prevent such incidents in future.

QUESTION 12
12.
1 Creditors' Ledger Statement of
Account of Styles account received
Suppliers from Styles
Suppliers
Balance before
12 160 41 380
errors/omissions
A
B
C
D
E
F
G
H
Balance after
errors/omissions 14
12.2 Refer to information E:

(a) Suggest TWO possible actions that the business can take
against the store man.
4
12.2 (b) Provide THREE internal control measures that the business
can use to prevent similar incidents in future.

QUESTION 13
13. CREDITORS' LEDGER OF KAROO TRADERS

1
DM SUPPLIERS (CL7)
Balance per Ledger Account 47 064
13. CREDITORS’ RECONCILIATION STATEMENT ON 30 JUNE 2018

2
Balance as per Creditor's Statement 40 271
13.3 Explain TWO benefits of using electronic funds transfer (EFT) system
rather than using EFTs for direct payments to creditors.
13.4 State TWO consequences for the business if they do not pay the amount
due to creditors on time.

QUESTION 14
14.1 No. Creditors’ Ledger of Statement of account

Broad Stores received from Ashes Ltd.
R114 485 R182 150
Balance
A. -9 500 -9 500
B.
C.
D.
E.
F.
G.
H.
I.
TOTAL
18

QUESTION 15
15.1 Provide TWO reasons why it is important for the business to

prepare the Creditors' Reconciliation Statement.
15.2 Calculate the correct Creditors' Control Account balance after

taking into account the relevant errors and omissions.
CREDITORS CONTROL ACCOUNT
87 690
15.3 Calculate the correct balances for creditors Zebo Suppliers and
Leo Wholesalers, list by taking into account the errors and
omissions.
Creditor Workings Balance

16 580
Zebo Suppliers
29 520
Leo Wholesalers
10

QUESTION 16
16.1 What is the purpose of reconciling the balance on the Creditors’

control account with the total of the Creditors’ List from the Creditors’
Ledger? State TWO points.
16.2 Record the errors and omissions in the given table and calculate the
correct balance and total.
Creditors control Creditors list

Preliminary balance/total R74 715 R32 595
A
B
C
D
E
F
Correct balance/total
12

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Accounting 1 Free State 2021

1.1 CREDITORS' RECONCILIATION

1.1.1 Creditors' Ledger

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2.1 CREDITORS' RECONCILIATION

2.1.3 Besides dismissing Vernon, provide ONE suggestion for action to be

Provide ONE suggestion to prevent this problem in future.

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3.3.2 What must the business do to prevent a similar incident in

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4.1 CREDITORS' RECONCILIATION

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Balance R160 300

6.2 Prepare the correct Creditors’ List of balances on 30 June 2014.

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Mango Traders (8 465

Serengeti Stores (5 123

Post Network (12 874

Serengeti Wholesalers (14 869

Riviria Distributors (21 119

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Balance according Creditors control 31 105

Balance according to Creditors list 37 415

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9.1 CREDITOR’S LEDGER

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10.1 Briefly explain how the preparation of a creditors’ reconciliation as an

Creditors’ Control Creditors’ List

Provisional balance/total R 74 715 R32 595

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11.1 CREDITORS LEDGER

11.2 Refer to Information (vi):

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12.2 Refer to information E:

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13. CREDITORS' LEDGER OF KAROO TRADERS

13. CREDITORS’ RECONCILIATION STATEMENT ON 30 JUNE 2018

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14.1 No. Creditors’ Ledger of Statement of account

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15.1 Provide TWO reasons why it is important for the business to

15.2 Calculate the correct Creditors' Control Account balance after

CREDITORS CONTROL ACCOUNT

Creditor Workings Balance

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16.1 What is the purpose of reconciling the balance on the Creditors’

Creditors control Creditors list

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