Assume that a company using a purchases journal made an error in totaling the journal's columns.The error should be discovered:
A)When the purchases journal is posted to the general ledger.
B)When the trial balance is prepared.
C)When the total of the schedule of accounts payable is compared with the balance of the Accounts Payable account.
D)When the creditors receive their payments.
E)When the financial statements are prepared.

Question

Quizplus · Accepted Answer

When the total of the schedule of accounts payable is compared with the balance of the Accounts Payable account, any discrepancy between the two amounts would indicate an error in totaling the purchases journal. This is because the schedule of accounts payable lists all the individual amounts owed to creditors, which should match the balance of the Accounts Payable account in the general ledger. If the totals don't match, it suggests an error in recording purchases or totaling the purchases journal. The other options are not as specific for detecting this type of error, as a misreported or transposed number can still balance the general ledger and trial balance, and payments to creditors may not uncover an error in totaling the purchases journal. The error may not even impact the financial statements if it does not affect the overall accuracy of the accounts.

Assume That a Company Using a Purchases Journal Made an Error