FA – Ch. 14 Control Accounts

Q.1 You are given the following information:

Receivables at 1 January 20X3 $10,000

Receivables at 31 December 20X3 $9,000

Total receipts during 20X3 (including cash sales of $5,000) $85,000

What is the figure for sales on credit during 20X3

• $81,000

• $86,000

• $79,000

• $84,000

Q.2 A supplier sends you a statement showing a balance outstanding of $14,350. Your own records show a

balance outstanding of $14,500.

Which one of the following could be the reason for this difference?

• The supplier sent an invoice for $150 which you have not yet received.

• The supplier has allowed you $150 cash discount which you had omitted to enter in your ledgers.

• You have paid the supplier $150 which he has not yet accounted for.

• You have returned goods worth $150 which the supplier has not yet accounted for.

Your payables control account has a balance at 1 October 20X8 of $34,500 credit. During October,

credit purchases were $78,400, cash purchases were $2,400 and payments made to suppliers,

excluding cash purchases, and after deducting settlement discounts of $1,200, were $68,900.

Purchase returns were $4,700.

What was the closing balance?

• $38,100

• $40,500

• $47,500

• $49,900

Q.4 A receivables ledger control account had a closing balance of $8,500. It contained a contra to the

payables ledger of $400, but this had been entered on the wrong side of the control account.

What should be the correct balance on the control account?

• $7,700 debit

• $8,100 debit

• $8,400 debit

• $8,900 debit

Q.5 Which of the following items could appear on the credit side of a receivables ledger control account?

1 Cash received from customers

2 Irrecoverable debts written off

3 Increase in allowance for receivables

4 Discounts allowed

5 Sales

6 Credits for goods returned by customers

7 Cash refunds to customers

• 1, 2, 4 and 6

• 1, 2, 4 and 7

• 3, 4, 5 and 6

• 5 and 7

Please refer material for this question.

Q.6 An inexperienced bookkeeper has drawn up the following receivables ledger control account:

RECEIVABLES LEDGER CONTROL ACCOUNT

$ $

Opening balance 180,000 Credit sales 190,000

Cash from credit customers 228,000 Irrecoverable debts written off 1,500

Sales returns 8,000 Contras against payables 2,400

Cash refunds to credit customers 3,300 Closing balance (balancing figure) 229,600

Discount allowed 4,200

423,500 423,500

What should the closing balance be after correcting the errors made in preparing the account?

• $130,600

• $129,200

• $142,400

• $214,600

Q.7 The payables ledger control account below contains a number of errors:

PAYABLES LEDGER CONTROL ACCOUNT

$ $

Opening balance (amounts Purchases 1,268,600

owed to suppliers) 318,600 Contras against debit

Cash paid to suppliers 1,364,300 balances in receivables ledger 48,000

Purchases returns 41,200 Discounts received 8,200

Refunds received from suppliers 2,700 Closing balance 402,000

$1,726,800 $1,726,800

All items relate to credit purchases.

What should the closing balance be when all the errors are corrected?

• $128,200

• $509,000

• $224,200

• $144,600

Q.8 The following control account has been prepared by a trainee accountant:

RECEIVABLES LEDGER CONTROL ACCOUNT

$ $

Opening balance 308,600 Cash received from credit customers 147,200

Credit sales 154,200 Discounts allowed to credit

Cash sales 88,100 customers 1,400

Contras against credit balances in Interest charged on overdue

payables ledger 4,600 accounts 2,400

Irrecoverable debts written off 4,900

Allowance for receivables 2,800

Closing balance 396,800

555,500 555,500

What should the closing balance be when all the errors made in preparing the receivables ledger control account have been corrected?

• $395,200

• $304,300

• $307,100

• $309,500

Q.9 The following receivables ledger control account prepared by a trainee accountant contains a number of errors:

RECEIVABLES LEDGER CONTROL ACCOUNT

$ $

20X4 20X4

1 Jan Balance 614,000 31 Dec Credit sales 301,000

31 Jan Cash from credit customers 311,000 Discounts allowed 3,400

Contras against amounts Irrecoverable debts

due to suppliers in written off 32,000

payables ledger 8,650 Interest charged on overdue

Accounts 1,600

Balance 595,650

933,650 933,650

What should the closing balance on the control account be after the errors in it have been corrected?

• $561,550

• $578,850

• $581,550

• $568,350

Q.10 Your organisation sold goods to PQ Co for $800 less trade discount of 20% and cash discount of 5% for payment within 14 days. The invoice was settled by cheque five days later. Which one of the following gives the entries required to record BOTH of these transactions?

• Dr. PQ Co $ 640 Cr. Sales $ 640 Dr. Bank 608 Dr. Discount allowed 32 Cr. PQ Co. 640

• Dr. PQ Co $ 640 Cr. Sales $ 640 Dr. Bank 600 Dr. Discount allowed 40 Cr. PQ Co. 640

• Dr. PQ Co $ 640 Cr. Sales $ 640 Dr. Bank 608 Dr. Discount received 32 Cr. PQ Co. 640

• Dr. PQ Co $ 800 Cr. Sales $ 800 Dr. Bank 608 Dr. Discount allowed 182 Cr. PQ Co. 800