Debtors and Creditors reconciliation
- Internal reconciliation = fixing errors that we have made [all entries have been made by
us]
- Comparing the debtors control and creditors control T accounts to the debtors and
creditors list
- Debtors list = shows how much each debtor owes you [individually]
- Debtors control = shows you the total owed by all debtors
- Total of debtors control should equal the total debtors list
- Creditors list = shows how much you owe each creditor [individually]
- Creditors control = shows you the total owed to all creditors
- Total of creditors control should equally the total of creditors list
- If the totals don't agree, then we have made errors [either in T account, or list, or both]
Types of errors
1. A transaction was not recorded at all [fix both]
2. A transaction was recorded incorrectly [fix both]
3. A column total was added incorrectly [fix account only]
4. A transaction was incorrectly posted to an individual account [list only]
5. A transaction was recorded on the wrong side of either the list or the control account
[record DOUBLE amount on correct side]
Debtors reconciliation
- Always internal [mistakes are always ours] → as we compare ledger to list
- b/d [opening balance] must be included in the month before
- Credit notes must come off of month they’re in
- Pay oldest debt first
- R/D cheque would go into months they paid, not youngest debt, because they need to
be charged interest on amounts they never actually paid
- Subtotals [outstanding] in debtors analysis must add up to total column in debtors ledger
[check to see if you're right]
- Internal reconciliation = fixing errors that we have made [all entries have been made by
us]
- Comparing the debtors control and creditors control T accounts to the debtors and
creditors list
- Debtors list = shows how much each debtor owes you [individually]
- Debtors control = shows you the total owed by all debtors
- Total of debtors control should equal the total debtors list
- Creditors list = shows how much you owe each creditor [individually]
- Creditors control = shows you the total owed to all creditors
- Total of creditors control should equally the total of creditors list
- If the totals don't agree, then we have made errors [either in T account, or list, or both]
Types of errors
1. A transaction was not recorded at all [fix both]
2. A transaction was recorded incorrectly [fix both]
3. A column total was added incorrectly [fix account only]
4. A transaction was incorrectly posted to an individual account [list only]
5. A transaction was recorded on the wrong side of either the list or the control account
[record DOUBLE amount on correct side]
Debtors reconciliation
- Always internal [mistakes are always ours] → as we compare ledger to list
- b/d [opening balance] must be included in the month before
- Credit notes must come off of month they’re in
- Pay oldest debt first
- R/D cheque would go into months they paid, not youngest debt, because they need to
be charged interest on amounts they never actually paid
- Subtotals [outstanding] in debtors analysis must add up to total column in debtors ledger
[check to see if you're right]
