Accounting Chapter 16 - Past Year MCQ

Why is a sales ledger control account usually prepared by a different member of staff than the person who maintains the sales ledger?

• to deter fraud
• to locate errors
• to provide an instant total of trade receivables
• to speed production of financial statements

Tamal provided the following information for March, his first month of trading. credit purchases 9100 credit purchases returned 322 total payments to credit suppliers 5358 During the month, Tamal overpaid a supplier by $94. He did not make any further purchases from this supplier in March. What were the balances on Tamal’s purchases ledger control account on 1 April?

• debit - 0 | credit - 3420
• debit - 0 | credit - 3514
• debit - 94 | credit - 3420
• debit - 94 | credit - 3514

Which item is debited in a sales ledger control account?

• cash discount
• contra entry
• interest on overdue account
• provision for doubtful debts

Leroy provided the following information for May. What was the balance on his purchases ledger control account on 1 June?

• $595
• $605
• $613
• $623

What is included in a purchases ledger control account?

• cash purchases
• debts written off as irrecoverable
• discount allowed
• goods returned to credit suppliers

Javid’s sales ledger control account had a debit balance of $12 000. Interest on an overdue account, $40, and discount allowed, $150, had been omitted. What was the correct balance on the sales ledger control account?

• $11 810
• $11 890
• $12 110
• $12 190

Raj is both a customer of and a supplier to Balbir. Raj’s account in Balbir’s sales ledger showed a debit balance of $300. There was a credit balance of $100 on Raj’s account in the purchases ledger. A contra entry between the two accounts was agreed. Which entry would Balbir make in his purchases ledger control account?

• credit $100
• credit $200
• debit $100
• debit $200

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

• to identify irrecoverable debts
• to make fraud more difficult
• to provide the total owed to trade payables
• to show the total of cash and credit sales

George is preparing his purchases ledger control account. Which information would he obtain from his general journal?

• contra entries with the sales ledger
• goods returned to credit suppliers
• irrecoverable debts written off
• refunds received from credit suppliers

John Smith provided the following information: What was the balance on the purchases ledger control account on 1 June 2013?

• $2930 credit
• $4370 credit
• $2930 debit
• $4370 debit