Answer To Accounting Test No CO 2 On Control Accounts

September 22nd, 2008 Comments off
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Append below the answer to Accounting Test No CO 2 on Control Accounts:

ANSWER To Accounting Question No. CO 2 On Control Accounts

(a) Purchases & Sales Ledger Control Accounts:

 

Purchases Ledger Control Account

 

Debit($)

 

Credit($)

2008

 

2008

 

July 1 Balance b/d

186

July 1 Balance b/d

17,960

July 31

Returns outwards

1,024

July 31

Credit Purchases

49,216

Discount received

1,045

Balanced c/d

212

Payment to supplier

47,310

 

 

Contra

450

 

 

Balance c/d

17,373

 

 

 

67,388

 

67,388

Aug 1 Balance b/d

212

Aug 1 Balance b/d

17,373

 

Sales Ledger Control Account

 

Debit($)

 

Credit($)

2008

 

2008

 

July 1 Balance b/d

28,240

July 1 Balance b/d

235

July 31

Credit Sales

1,024

July 31

Bad debts

190

Dishonored cheque

63,140

Returns inwards

1,642

Legal Fee

150

Cash received

67,930

Balance c/d

287

Discount allowed

1,820

 

 

Contra

450

 

 

Balance c/d

19,865

 

92,132

 

92,132

Aug 1 Balance b/d

19,865

Aug 1 Balance b/d

287

(b) Balance Sheet Of Jim at 31 st July 2008

 

($)

($)

Current Assets

 

 

Debtors ( Working No 1)

 

19,578

Less: Provisions for bad & doubtful debts

 

320

 

 

19,258

 

 

 

Current Liabilities

 

 

Creditors(Working No.2)

17,161

 

Workings:

1. Debtors balance =$19,865-$287= $19,578

2. Creditors balance=$17,373-$212= $17,161

(c) By keeping the Sales Ledger Control into six parts according to sales areas and to keep Control Account for each part, Jim would then know the total sales and debtors balances for each sales area during an accounting period.

 

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