Waec Model Questions Vol1 2024 Financial Accounting Question 8

Alpha Trading Ltd. uses a Sales Ledger Control (SLC) Account and a Purchases Ledger Control (PLC) Account to summarise the balances of its subsidiary ledgers. The following extracts relate to the month of February 2024. **Sales Ledger (Debtors) subsidiary ledger totals at 1 February 2024:** - Total of all debtor balances: ₦420,000. **Purchases Ledger (Creditors) subsidiary ledger totals at 1 February 2024:** - Total of all creditor balances: ₦310,000. During February the following transactions occurred (all amounts in ₦): 1. Credit sales of ₦180,000 were made; cash sales amounted to ₦45,000. 2. Sales returns (goods returned by customers) totalled ₦12,000. 3. Trade discounts allowed on credit sales amounted to ₦5,000. 4. Receipts from debtors (cash received) amounted to ₦130,000. 5. One credit sale of ₦22,000 was omitted from the sales ledger. 6. A receipt of ₦8,000 from a debtor was posted twice in the cash receipts journal. 7. Purchases on credit amounted to ₦95,000. 8. Purchase returns (goods returned to suppliers) totalled ₦7,000. 9. Discount received from a supplier on a purchase of ₦4,000. 10. Payments to creditors (cash paid) amounted to ₦85,000. 11. A payment of ₦10,000 to a creditor was omitted from the PLC. Using the above information, answer the following: a) Prepare the Sales Ledger Control Account for February 2024 showing all entries and compute the closing balance. b) Prepare the Purchases Ledger Control Account for February 2024 showing all entries and compute the closing balance. c) Compare the closing balances of the control accounts with the summed balances of the respective subsidiary ledgers (assume that the subsidiary ledgers were correctly updated for all transactions except the omissions and double posting mentioned). Identify any discrepancies and explain their nature. d) Suggest two internal control measures that could prevent the types of errors identified in parts (a)–(c).