natalieb12
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Hi, i'm Natalie. I need help with a question on my AAT mock test.

After banging my head against a brick wall trying to find the answer several times i thought someone else could help me out so that i could understand it better to get the balance.

So the question is:


You are presented with the following information:
£
Creditors opening balance 54,000
Payments made to creditors 147,000
Cash purchases 5,700
Credit purchases 159,000
Goods returned to creditors 3,300
Settlement discount received from creditors 2,400

The closing balance on the purchase ledger control account should be?

£66,000 (DR)
£66,000 (CR)
£60,300 (DR)
£60,300 (CR)

Please someone help?
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A.A.T.
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The closing balance on the purchase ledger control account should be?

£66,000 (DR)
£66,000 (CR)
£60,300 (DR)
£60,300 (CR)

Note that the other options for 66,000 is testing if you include "Cash purchases 5,700". You don't include it in the control account as control ac/s control individual ledgers for creditors/debtors.

Answer best worked via a T account.

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natalieb12
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Thanks very much for that, i never thought of doing a t account. Now that you've done it i understand better

Natalie
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natalieb12
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Hi

Can someone help me with a question on my test?
i have already filled in for ii,iii,iv which are correct

Question 22
A business pays its staff by cheque at the end of each month. The business maintains a wages control account for the purpose of calculating wages and contributions. A summary of the payroll transactions for the month ended 31 May 201Y is provided below:

Item Amount £
Gross wages 64,750
Employees NIC’s 6,470
Employers NIC’s 7,750
PAYE income tax 11,008
Trade union subscriptions 750

Required
Prepare journal entries needed to record the following transactions in the general ledger:
(i) The wages expense
(ii) The liability to HM Revenue & Customs
(iii) The net wages paid to employees
(iv) The liability to the trade union

(i)
Account Name Amount £ Debit Credit

Wages expense 46522
bank 46522
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Samtheman1
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(Original post by natalieb12)
Hi

Can someone help me with a question on my test?
i have already filled in for ii,iii,iv which are correct

Question 22
A business pays its staff by cheque at the end of each month. The business maintains a wages control account for the purpose of calculating wages and contributions. A summary of the payroll transactions for the month ended 31 May 201Y is provided below:

Item Amount £
Gross wages 64,750
Employees NIC’s 6,470
Employers NIC’s 7,750
PAYE income tax 11,008
Trade union subscriptions 750

Required
Prepare journal entries needed to record the following transactions in the general ledger:
(i) The wages expense
(ii) The liability to HM Revenue & Customs
(iii) The net wages paid to employees
(iv) The liability to the trade union

(i)
Account Name Amount £ Debit Credit

Wages expense 46522
bank 46522
Look at the back where the answers are.
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DJKL
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(Original post by natalieb12)
Hi

Can someone help me with a question on my test?
i have already filled in for ii,iii,iv which are correct

Question 22
A business pays its staff by cheque at the end of each month. The business maintains a wages control account for the purpose of calculating wages and contributions. A summary of the payroll transactions for the month ended 31 May 201Y is provided below:

Item Amount £
Gross wages 64,750
Employees NIC’s 6,470
Employers NIC’s 7,750
PAYE income tax 11,008
Trade union subscriptions 750

Required
Prepare journal entries needed to record the following transactions in the general ledger:
(i) The wages expense
(ii) The liability to HM Revenue & Customs
(iii) The net wages paid to employees
(iv) The liability to the trade union

(i)
Account Name Amount £ Debit Credit

Wages expense 46522
bank 46522
Dr Wage Expense 72,500
Cr Net pay control 46,522
Cr PAYE/NI Due 25228
Cr Union Dues Control 750


When you pay the wages you get following but the question is not asking this, it is asking you to write the journal to post the wages:

Dr wages control £46,522
Cr bank £46,522

but only of course if you pay the correct amount.

The purpose of the controls within the general ledger are to help you readily spot a difference, i.e. if a balance at month end on wages control or if the PAYE/NI control balance does not agree to that month's liability.

Control accounts are a great way of isolating errors within a set of books and on large ledgers are the only time effective way of checking the key accounts square.

Trust this assists
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natalieb12
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Thanks for your help. I originally put the same as you in my mock, but the markers keep on sending back the same correction saying that the double entry is incorrect. Do you have any idea why this can be?
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ZurichSL
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A business pays its staff by cheque at the end of each month. The business maintains a wages control account for the purpose of calculating wages and contributions. A summary of the payroll transactions for the month ended 31 May 201Y is provided below:


























Item
Amount £
Gross wages
64,750
Employees NIC’s
6,470
Employers NIC’s
7,750
PAYE income tax
11,008
Trade union subscriptions
750


Required
Prepare journal entries needed to record the following transactions in the general ledger:
(i) The wages expense
(ii) The liability to HM Revenue & Customs
(iii) The net wages paid to employees
(iv) The liability to the trade union

Select your account names from the following:
Bank, Employees NIC’s, Employers NIC’s, PAYE income tax, Trade union subscriptions, Wages expense, Wages control, HM Revenue & Customs

Someone can help me to verify the correct answer please !!!
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qr95
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(Original post by ZurichSL)
A business pays its staff by cheque at the end of each month. The business maintains a wages control account for the purpose of calculating wages and contributions. A summary of the payroll transactions for the month ended 31 May 201Y is provided below:


























Item
Amount £
Gross wages
64,750
Employees NIC’s
6,470
Employers NIC’s
7,750
PAYE income tax
11,008
Trade union subscriptions
750


Required
Prepare journal entries needed to record the following transactions in the general ledger:
(i) The wages expense
(ii) The liability to HM Revenue & Customs
(iii) The net wages paid to employees
(iv) The liability to the trade union

Select your account names from the following:
Bank, Employees NIC’s, Employers NIC’s, PAYE income tax, Trade union subscriptions, Wages expense, Wages control, HM Revenue & Customs

Someone can help me to verify the correct answer please !!!
Is this aat level 2?

Posted from TSR Mobile
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ZurichSL
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A business pays its staff by cheque at the end of each month. The business maintains a wages control account for the purpose of calculating wages and contributions. A summary of the payroll transactions for the month ended 31 May 201Y is provided below:

Item Amount £
Gross wages 64,750
Employees NIC’s 6,470
Employers NIC’s 7,750
PAYE income tax 11,008
Trade union subscriptions 750

Required
Prepare journal entries needed to record the following transactions in the general ledger:
(i) The wages expense
(ii) The liability to HM Revenue & Customs
(iii) The net wages paid to employees
(iv) The liability to the trade union


Select your account names from the following:
Bank, Employees NIC’s, Employers NIC’s, PAYE income tax, Trade union subscriptions, Wages expense, Wages control, HM Revenue & Customs
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ZurichSL
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YEs , sir !!! Basic Accounting BOOK 3.
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