Reconciling the office-supplies ledger
The office-supplies ledger for February closes at ₹1,73,810 against an allotment of ₹2,50,000, which the Head of Office reads as ₹76,190 unspent. The bill clerk gives you nine vouchers chargeable to the head: V-101 ₹18,400; V-103 ₹7,250; V-104 ₹26,750 for printer cartridges, posted in the ledger under 'Furniture and Equipment'; V-107 ₹41,300; V-112 ₹9,600, posted in the ledger as ₹9,060; V-115 ₹15,900; V-121 ₹63,500; and V-118(a) and V-118(b), ₹26,000 each, annual maintenance bills for the photocopier that are not yet posted or paid. A second posting of V-101 appears in the ledger as V-119, ₹18,400. The standing rule is that any purchase above ₹50,000 requires three quotations, and V-118 was executed as two separate work orders. The Head wants the correct expenditure, the amount actually free, and a short note she can sign.
1. Prepare the reconciliation and state the correct expenditure under the head.
Read the worked answer
Start from what is properly chargeable and posted:
V-101 18,400 + V-103 7,250 + V-107 41,300 + V-112 9,600 + V-115 15,900 + V-121 63,500 = ₹1,55,950.
V-104 (₹26,750) is excluded: cartridges are consumables, not equipment, so it belongs to this head but sits wrongly in the furniture ledger. It needs a reclassification entry, not deletion - total expenditure across heads is unaffected.
Reconciliation: ledger ₹1,73,810 − correct ₹1,55,950 = ₹17,860 overstated, explained exactly by two errors:
- duplicate posting of V-101 as V-119: +₹18,400
- V-112 entered as ₹9,060 instead of ₹9,600: −₹540 Net: 18,400 − 540 = ₹17,860. The reconciliation agrees to the rupee, which confirms no third error is hiding in the total.
Correct position: expenditure to date ₹1,55,950; V-118 ₹52,000 approved but unpaid; correct unspent balance ₹94,050, or ₹42,050 if V-118 is paid. The Head's figure of ₹76,190 is wrong and understates what is available, which matters because she may be deferring legitimate bills on a false premise.
2. Identify the control failures and the procurement issue, and advise what should be reported and to whom.
Read the worked answer
Three distinct problems, with different remedies:
- Duplicate payment risk (V-101/V-119). Same bill posted twice under two numbers. Nothing has been overpaid yet because V-119 has no bill behind it, but the ledger is overstated by ₹18,400. Cure: reverse V-119 by journal entry, and require voucher numbers to be entered against a serial register so a second posting fails at entry.
- Wrong head (V-104). Cartridges cannot sit under 'Furniture and Equipment'. Cure: reclassification with the Head's approval; no bearing on the total.
- Split purchase (V-118). Two work orders of ₹26,000 each for one ₹52,000 annual maintenance contract, structured to sit under the ₹50,000 quotation threshold. That is a breach of the rule in substance: the rule applies to the value of the requirement, not the value of each order. The payment is for a service actually rendered, so withholding it would penalise the vendor for the office's error, but it cannot be passed silently.
Report all three to the Head in the note, flagging the split purchase for regularisation by the competent authority with an explanation on file, and recommend that future maintenance contracts be treated as annual requirements valued in aggregate.
3. Write the paragraph the Head can sign (80 words or fewer), covering the balance and the flag.
Read the worked answer
'February reconciliation: the office-supplies ledger shows ₹1,73,810 against an allotment of ₹2,50,000. After reversing a duplicate posting of V-101 (₹18,400) and correcting V-112 (₹540), expenditure is ₹1,55,950. V-104 (₹26,750) is reclassified to this head. The unspent balance is therefore ₹94,050, or ₹42,050 after the pending ₹52,000 maintenance bill. That bill was split into two work orders below the ₹50,000 quotation threshold; it is placed before the competent authority for regularisation.'
Note what the paragraph does: it states the corrected figure first, gives the two adjustments so the reader can verify, and puts the awkward item in the open with a proposed route rather than burying it.