A Level Accounting: Reconciliation and verification (Cambridge 9706) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions follow the Cambridge International AS & A Level Accounting 9706 syllabus for examination in 2026, 2027 and 2028, section 1.4 Reconciliation and verification (AS Level): 1.4.1 reconciliation and verification, 1.4.2 trial balance, 1.4.3 bank reconciliation statements and 1.4.4 control accounts. All amounts are in dollars ($).

Read the study guide and revision notes first. See the the course hub, the checklist and the free diagnostics.

Questions

1. Name the type of error in each case.

(a) An office desk costing 450 was debited to the purchases account. [1] (b) A credit sale of 380 to R. Rasool was debited to R. Rashid’s account. [1] (c) A customer’s cheque for 560 was entered as 650 in the cash book and the customer’s account. [1] (d) Rent paid of 700 was debited to bank and credited to the rent account. [1] (e) A credit sale of 1,260 was not entered in any book. [1] (f) Wages were overstated by 250 and commission received was overstated by 250. [1] (g) Discount allowed of 90 was debited to the discount allowed account, with no entry in the customer’s account. Does the trial balance agree? If not, state the difference and the larger side. [2]

2. (a) State two internal and two external sources of documentation used to verify ledger accounts, and the record each checks. [4] (b) Explain one benefit and one limitation of verification procedures. [2]

3. The trial balance of Brackenridge Tiles did not agree: debits 84,320 and credits 85,286. The difference went to a suspense account. Then three errors were found: (i) a cash purchase of 1,240 was debited to purchases correctly but credited to bank as 1,420; (ii) a customer’s cheque for 750 was credited to the customer’s account but not entered in the cash book; (iii) goods returned by a customer, 95, were credited to the customer’s account but debited to returns inwards as 59.

(a) Calculate the suspense balance and state whether it is debit or credit. [2] (b) Prepare journal entries correcting the three errors. [6] (c) Prepare the suspense account to show it cleared. [3]

4. At 30 June the cash book of Thornley Cycles showed a bank balance of 3,846 debit. The bank statement showed 3,528 credit. Cheques of 412 and 268 were unpresented and a lodgement of 1,075 was not yet credited. The statement also showed a direct debit of 190, a credit transfer from a customer of 640, bank charges of 48 and a customer’s cheque for 325 returned unpaid. None of these four was in the cash book.

(a) Update the cash book and give the new balance. [5] (b) Prepare a bank reconciliation statement starting with the bank statement balance. [4] (c) State one benefit and one limitation of a bank reconciliation statement. [2]

5. Marwood Interiors: customers owing at 1 January 18,450; customers in credit 220. Credit sales 96,300. Receipts from customers 71,900. Discount allowed 1,640. Returns inwards 2,150. Bad debts written off 1,380. A cheque for 475 was dishonoured. A contra of 900 was made with the purchases ledger. Customers in credit at 31 December 310.

(a) Prepare the sales ledger control account and find the closing balance of customers owing. [8] (b) Explain why cash sales are not in this account but the contra is. [3]

6. Larkhill Fabrics: purchases ledger control account balance 24,860 credit; list of supplier balances 24,275. Found: (i) the purchases day book was overcast by 400; (ii) discount received of 150 was in a supplier’s account but not the control account; (iii) an invoice for 275 was in the day book total but not posted to the supplier’s account; (iv) returns outwards of 120 were credited to a supplier’s account instead of debited.

(a) Calculate the corrected control account balance. [3] (b) Reconcile the list of balances to the corrected control account. [4] (c) An invoice for 530 was posted to the wrong supplier’s account. Explain why the reconciliation did not reveal this. [2] (d) State one benefit of keeping control accounts. [1]

7. Ardwick Motors reported a draft profit of 52,600. Errors found: (i) equipment costing 1,800 was debited to repairs; (ii) a credit sale of 960 was omitted from all records; (iii) rent received of 400 was debited to rent received and credited to bank; (iv) electricity of 330 was debited to water charges; (v) a fuel payment of 215 was entered as 125 in both accounts. Ignore depreciation and cost of sales.

(a) Calculate the corrected profit. [6] (b) State the effect on non-current assets, trade receivables and bank. [4]

8. The bookkeeper at Wrenfield Joinery says: “The trial balance agreed, so the accounts are correct.” Evaluate this statement. [6]

9. Stainsby Wholesale has a draft sales ledger control account balance of 41,630 debit and a draft profit of 38,900. Found: (i) the sales day book was undercast by 700; (ii) a bad debt of 260 was approved but never recorded; (iii) a customer’s cheque for 475 was dishonoured and not recorded.

(a) Calculate the corrected control account balance. [4] (b) Explain the effect of the corrections on profit, trade receivables and bank. [5]

10. Birchgrove Textiles pays suppliers by cheque. The owner wants to stop monthly bank reconciliations, which take six staff hours, and rely on the year-end trial balance. Unpresented cheques at each month end:

Month	Total	Over 60 days old
January	2,400	0
February	3,150	900
March	4,020	1,850

Evaluate the proposal and make a recommendation. [9]

Answers

1. (a) Principle (an asset treated as an expense) [1]; (b) commission [1]; (c) original entry [1]; (d) reversal [1]; (e) omission [1]; (f) compensating [1] (g) The trial balance does not agree [1]; debits exceed credits by 90 [1] Examiner insight: Also say whether the trial balance would reveal each error; none of (a) to (f) would.

2. (a) Internal: copy sales invoices, checking the sales day book and customers’ accounts [1]; petty cash vouchers, checking petty cash payments [1]. External: bank statement, checking the cash book [1]; supplier statement, checking the supplier’s account [1]. (b) Benefit: errors or fraud are found before the financial statements are prepared [1]. Limitation: a missing or wrong document goes unnoticed [1]. Examiner insight: Link each document to the record it checks.

3. (a) 85,286 − 84,320 = 966 [1]; debit, because the debits were short [1] (b)

(i)   Dr Bank               180    Cr Suspense   180   [2]
(ii)  Dr Bank               750    Cr Suspense   750   [2]
(iii) Dr Returns inwards     36    Cr Suspense    36   [2]

(c)

Suspense account
Dr                          Cr
TB difference   966  [1]    Bank (i)              180
                            Bank (ii)             750
                            Returns inwards (iii)  36  [1]
                966                               966  [1]

Examiner insight: A suspense account that ends at zero is a quick check on your journals.

4. (a)

Balance per cash book                   3,846
Add: credit transfer                      640   [1]
Less: direct debit                       (190)  [1]
Less: bank charges                        (48)  [1]
Less: dishonoured cheque                 (325)  [1]
Updated cash book balance               3,923   [1]

(b)

Balance per bank statement              3,528   [1]
Add: lodgement not yet credited         1,075   [1]
Less: unpresented cheques (412 + 268)    (680)  [1]
Balance per updated cash book           3,923   [1]

(c) Benefit: an independent external check on the cash records [1]. Limitation: it checks only the bank and cash figures, not other accounts [1]. Examiner insight: Ending on the updated cash book figure shows each item sat on the correct side.

5. (a)

Sales ledger control account
Dr                             Cr
Balance b/d        18,450      Balance b/d (credit)      220
Credit sales       96,300      Bank                   71,900
Bank (dishonoured)    475      Discount allowed        1,640
Balance c/d (cr)      310      Returns inwards         2,150
                               Bad debts               1,380
                               Purchases ledger contra   900
                               Balance c/d (debit)    37,345
                  115,535                            115,535

Debit entries [2]; credit entries [3]; closing balance 37,345 [2]; totals agree [1] (b) Cash sales are paid at once, so no receivable arises [1]. A contra applies where one party is both customer and supplier [1]; it reduces the amount owed with no cash moving [1]. Examiner insight: Credit balances on customers’ accounts are easy to omit; place them opposite the main balance.

6. (a) 24,860 − 400 [1] − 150 [1] = 24,310 [1] (b) List total 24,275 [1]; add omitted invoice 275 [1]; deduct 240, since 120 credited instead of debited is wrong by 2 × 120 [1]; result 24,310, agreeing with the control account [1] (c) The total of balances is unchanged, so the list and control account still agree [1]. This commission error shows only when individual supplier accounts are checked against statements [1]. (d) One of: the total owed is known without adding every account; an error is traced to the ledger or to the control account [1]. Examiner insight: Decide first whether each error affects the control account, the list or both.

7. (a)

Draft profit                              52,600
(i)   Equipment treated as expense        +1,800   [1]
(ii)  Omitted sale                          +960   [1]
(iii) Reversal of rent (2 x 400)            +800   [1]
(iv)  Expense to expense                       0   [1]
(v)   Fuel under-recorded (215 − 125)        −90   [1]
Corrected profit                          56,070   [1]

(b) Non-current assets +1,800 [1]. Trade receivables +960 [1]. Bank +800 for the rent [1] and −90 for the fuel, a net rise of 710 [1]. Examiner insight: For a reversal the effect is double the amount; state the correcting entry first.

8. Benefit: it shows total debits equal total credits, a quick check on arithmetic and one-sided entries [1], and a base for the financial statements [1]. Limitations: it does not reveal omission, such as an unrecorded invoice [1]; commission, such as a posting to the wrong customer [1]; or compensating errors, where two mistakes cancel [1]. Judgement: agreement shows only arithmetic consistency, so further checks are needed [1]. Examiner insight: A conclusion that answers the bookkeeper’s claim directly, after the evidence, reads as evaluation.

9. (a) 41,630 + 700 [1] − 260 [1] + 475 [1] = 42,545 [1] (b) Profit rises 700 for sales and falls 260 for the bad debt, a net rise of 440, giving 39,340 [2]. Trade receivables rise by 915 to 42,545 [1]. The bank balance falls by 475 [1]. The dishonoured cheque swaps bank for receivables, so profit is unaffected [1]. Examiner insight: Take each correction line by line; say when one affects only the statement of financial position.

10. Cheques over 60 days old rose from 0% to 28.6% to 46.0% of the total [1]; the total rose 67.5% [1]. Cheques may be unsent, lost or held back to flatter the bank balance, so this needs investigating [2]. For keeping reconciliations: an independent external check that finds errors or fraud while recent and traceable [1]; the year-end trial balance comes too late and would not reveal items missing from the cash book [1]. Against: it checks only cash and bank, and timing differences are normal [1]. Recommendation: keep monthly reconciliations and chase cheques over 60 days, because six hours is small against the risk shown [2]. Examiner insight: Evaluation tends to gain credit when you use the table’s figures and justify a decision.

Where marks are usually lost

• Naming an error without saying if the trial balance reveals it.
• Confusing principle with commission.
• Opening a suspense account for an error that does not unbalance the trial balance.
• Not updating the cash book first, or treating timing differences as errors.
• Writing benefits and limitations unlinked to the data.

Frequently asked questions

What does Cambridge 9706 section 1.4 cover? Section 1.4 Reconciliation and verification covers errors and the trial balance, suspense accounts, bank reconciliation statements, and sales and purchases ledger control accounts, together with the benefits and limitations of each procedure.

What should I say when naming a type of error? As well as naming the error, say whether the trial balance would reveal it. Naming an error without stating this is one of the common ways marks are lost.

When should a suspense account be opened? Only when an error makes the trial balance disagree. Opening a suspense account for an error that does not unbalance the trial balance is a common mistake.

How do you check a set of correcting journals in a suspense account question? Post the corrections to the suspense account; if it ends at zero, the journals have cleared the original difference.

How do you score well on evaluation questions in reconciliation topics? Use the figures given in the question and link each benefit and limitation to the data, then reach a justified recommendation. Benefits and limitations that are not linked to the data are a common reason marks are lost.

Next steps

• Review the revision notes and study guide.
• Use the course hub and checklist.
• Try the free 10-minute diagnostics.
• Book a free trial class.

Official syllabus

Cambridge International, Cambridge International AS & A Level Accounting 9706 syllabus for examination in 2026, 2027 and 2028, section 1.4 Reconciliation and verification.