Accounting Test Question No.CO 2 On Control Accounts

September 22nd, 2008 Comments off
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Another example of accounting question on Control Accounts:

Accounting Question Test CO No.2 On Control Accounts


Jim keeps control accounts for his Purchases and Sales Ledgers. He extracted the following balances from her books of accounts for the month of July 2008:





1st July

Purchase Ledger balance

Dr $186




Cr $17,960



Sales Ledger balance

Dr $28,240




Cr $235


31st July

Purchase on credit




Cash purchases




Sales on credit




Cash sales




Bad debts written off




Returns outwards




Returns inwards




Cash received from credit customers




Discount received




Dishonored cheque recharged to credit customer




Legal fees charged to customers




Payments to suppliers




Discount allowed




Sales ledger debit balances transferred to purchases ledger per contra




Purchase ledger debit balances at 31st July




Sales ledger credit balance at 31st July




Provision for bad and doubtful debts




(a)           Open the Purchases Ledger and Sales Ledger Control Accounts and post the entries for the month of July 2008,balancing at 31 st July (20 marks)

(b)           Show how the Debtors and Creditors should appear in the Balance Sheet as at 31 st July 2008 (5 marks)

(c)           Jim intends to divide its sales ( ie Debtors) Ledger into six parts according to sales areas and to keep a Control Account for each part. State one advantage that Jim might obtain from keeping such Control Account

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Financial Accounting


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