Journal Purchases Journal Page 1 Date Suppliers Name Invoice

Journalspurchases Journalpage1datesuppliers Nameinvoice Numberinvoice

The provided text appears to be an excerpt from a company's accounting records, specifically focusing on journal entries related to purchases, accounts payable, and related ledger accounts. The core task here involves analyzing the journal entries, ledger account balances, and their reconciliation to ensure the accuracy of the company's financial records. This includes understanding how purchase transactions are recorded, how payments are made to suppliers, and verifying whether the recorded balances in the general ledger match the detailed subsidiary ledger accounts. To fulfill this assignment, a comprehensive examination of the provided journal entries, ledger balances, and supporting documentation is required to determine if the accounts are properly maintained and reconciled, and to ensure compliance with accounting principles, particularly the matching principle and proper ledger control procedures.

Paper For Above instruction

In analyzing the financial records provided, the primary focus is on understanding the detailed transaction flow within the company's purchase and accounts payable systems and verifying the consistency of ledger balances. The initial step involves reviewing the purchase journal entries, which document supplier transactions including invoice numbers, dates, terms, and amounts. These entries form the foundation for recording liabilities and costs associated with purchases and freight-in, which are critical for accurate expense recognition and liability recognition in accordance with accrual accounting standards.

The purchase journal entries indicate that the company records supplier invoices by date, amount, and terms, ensuring that each transaction is accurately documented. The invoice number and date are crucial for tracking the accounts payable outstanding and ensuring timely payments. Additionally, freight-in charges are separately recorded, reflecting additional costs that contribute to the cost of inventory or operational expenses. Proper recording of these entry components supports transparent and accurate financial statements.

Next, the examination of the ledger accounts—specifically the Accounts Payable ledger, Supplies, and Purchase Returns and Allowances—provides insight into how these transactions are reflected in the company's financial statements. The Accounts Payable ledger tracks amounts owed to suppliers such as Simon’s Supply and Elite Computing, with an opening balance and subsequent changes due to purchases or payments. The snippet shows the balances as of January 1 and subsequent transactions, which must align with the journal entries to ensure accuracy.

In evaluating whether the total balances in the subsidiary ledger accounts match the general ledger balances, it is essential to perform a reconciliation process. This involves summing the balances from individual supplier accounts and comparing the resulting total with the Accounts Payable control account in the general ledger. If discrepancies exist, they must be investigated to identify potential errors such as omissions, double postings, or incorrect postings.

Furthermore, the purchase returns and allowances account reflect adjustments to reduce the total payable, which could relate to returned goods or allowances granted by suppliers. Monitoring these transactions ensures that the reported payable balances are net of such adjustments, aligning with good accounting practices.

Additionally, the freight-in account details the transportation costs associated with acquiring inventory. Proper allocation and recording of freight-in are vital for inventory valuation and cost of goods sold calculations under the perpetual or periodic inventory system. Ensuring the freight-in charges are accurately recorded and posted appropriately contributes to correct costing and profit reporting.

Finally, the critical question posed is whether the total of individual accounts in the subsidiary ledger matches the total balance reported in the general ledger. This process, known as reconciling subsidiary and control accounts, helps prevent and detect errors and fraud, ensuring the integrity of financial reporting.

Given the fragmented data and the lack of specific numerical totals, a detailed reconciliation would involve extracting the exact balances from each ledger account, summing them, and then comparing the sum to the general ledger control account balance. While the specific numbers are not conclusively provided in the excerpt, the process emphasizes the importance of routine reconciliation procedures in maintaining accurate financial records in accordance with Generally Accepted Accounting Principles (GAAP).

In conclusion, the analysis underscores the importance of consistent and accurate entry posting, the necessity of reconciling subsidiary ledger accounts with the general ledger, and the role of proper documentation in maintaining the integrity of financial statements. Ensuring these procedures are diligently followed aids in accurate financial reporting, enhances internal controls, and facilitates compliance with auditing standards.

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