Control accounts (Part 1)

Organize these labels (at the account's details column) into the right accounts. If the labels are not found in trade receivables account or trade payables account, organize the labels at other accounts.

Groups:

(a) Trade receivables account

,

(b) Trade payables account

,

(c) Other accounts

• Interest (payable)

• Provision for doubtful debts

• Irrecoverable debts

• Bank/cash (refunds to business)

• Sales

• Discount received

• Cash/bank (payment by the business)

• Bank/cash (refunds by the business)

• Balance b/d (credit balance)

• Interest (receivable)

• Purchases

• Return inwards

• Balance b/d (debit balance)

• Bank (dishonoured cheque)

• Return outwards

• Cash purchases

• Discount allowed

• Cash sales

• Cash/bank (receipt by the business)

Organize these items into the right source of information category for sales ledger control account

Groups:

(a) Journal

,

(b) Sales journal

,

(c) Sales returns journal

,

(d) Cash book

• Sales (credit)

• Sales returns

• Interest charged on overdue accounts

• Sold inventory on credit

• Refunds to credit customers.

• Discount allowed to credit customers

• Receipts from credit customers

• Irrecoverable debts written off

• Sell goods to credit customers.

• Return inwards

• Dishonoured cheque

What is the purpose of preparing a sales ledger control account?

• To calculate the total credit sales for the period.

• To calculate the total sales for the period.

• To check the arithmetical accuracy of the sales account.

• To check the arithmetical accuracy of the sales ledger accounts.

State advantages of maintaining a sales ledger control account.

• To reduce fraud due to a different member of the department compiling control accounts to the individual ledgers.

• To locate errors if the trial balance does not agree.

• To provide proof of the arithmetical accuracy of the sales ledger accounts.

• The total balances provided by the control accounts can then be used to assist in preparing financial statements.

Organize these labels into the right side of the trade receivables account

Groups:

(a) Debit

,

(b) Credit

• Cash

• Bank (dishonoured cheque)

• Balance b/d

• Sales

• Sales returns

• Bank

• Interest

• Bank/cash (refunds)

• Balance c/d

• Irrecoverable debts

• Discount allowed