a. Identify three books of account from which entries are made into control accounts b. State two uses of control accounts c i. List four items each which w...
Question 1 Report
a. Identify three books of account from which entries are made into control accounts
b. State two uses of control accounts
c i. List four items each which would be recorded on the debit side of:
-Purchases Ledger Control Account
c ii. List four items each which would be recorded on the debit side of:
- Sales Ledger Control Account
Answer Details
a. The three books of account from which entries are made into control accounts are:
- Sales Ledger (for sales made on credit)
- Purchases Ledger (for purchases made on credit)
- Returns Inwards/Outwards Journal (for goods returned by customers/suppliers)
b. Two uses of control accounts are:
- To check the accuracy of entries made in the subsidiary books of account (Sales/Purchases Ledgers) by comparing them to the balances in the control accounts.
- To provide a summary of transactions relating to debtors and creditors, which can be used to prepare the financial statements.
c. i. Four items recorded on the debit side of Purchases Ledger Control Account are:
- Purchases Returns (goods returned to suppliers)
- Purchase Allowances (allowances granted by suppliers)
- Carriage Inwards (costs incurred to transport goods to the business)
- Customs Duty (duty paid to government for imported goods)
c. ii. Four items recorded on the debit side of Sales Ledger Control Account are:
- Sales Returns (goods returned by customers)
- Sales Allowances (allowances granted to customers)
- Trade Discounts (discounts granted to customers)
- Bad Debts Written Off (debts that are unlikely to be collected and written off as expenses)
Download The App On Google Playstore
Everything you need to excel in your exams
