3.4. Control accounts
A subsection of Accounting, 7707, through 3. Verification of accounting records
Listing 10 of 30 questions
Ayesha is a trader who maintains a full set of accounting records and prepares control accounts at the end of each month. She provided the following information for the month of August 2021. $ On 1 August Sales ledger control account debit balance 9 800 Sales ledger control account credit balance Purchases ledger control account credit balance 7 700 Totals for the month Credit sales 88 850 Credit purchases 55 400 Cash purchases 1 860 Receipts from customers 82 100 Payments to credit suppliers 50 600 Discount received Discount allowed Irrecoverable debt written off Provision for doubtful debts Sales returns 2 400 Interest charged to customer on overdue account Contra between sales ledger and purchases ledger 2 920 The sales ledger control account credit balance brought down on 1 September 2021 was $350. REQUIRED Prepare the sales ledger control account and the purchases ledger control account for August 2021. Balance the accounts and bring down the balances on 1 September 2021. Name the book of prime entry which Ayesha would use to obtain the following information when preparing her sales ledger control account. Item Book of prime entry Returns Discount allowed Interest charged to customer on overdue account Contra entry Suggest two reasons why the sales ledger control account had a credit balance of $420 on 1 August 2021.
7707_w21_qp_22
THEORY
2021
Paper 2, Variant 2
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MC is a trader who maintains a full set of accounting records and prepares control accounts at the end of each month. REQUIRED Complete the table to name the book of prime entry which MC would use to obtain information when preparing control accounts. Item Book of prime entry Discount received from credit suppliers Purchases returns Contra entries Interest charged by credit suppliers Explain how a contra entry is treated in the ledger accounts. MC has provided the following information for the month of July 2022. $ On 1 July 2022 Purchases ledger control account credit balance b/d 21 400 Purchases ledger control account debit balance b/d Totals for the month Credit purchases 259 600 Credit purchases returns 9 800 Cash purchases Cheques paid to credit suppliers 228 200 Discount received 12 900 Cash paid to credit suppliers Interest charges by credit suppliers Contra sales ledger 2 260 At 31 July 2022 the purchases ledger control account had a credit balance c/d of $180. REQUIRED Prepare the purchases ledger control account for the month of July 2022. Balance the account and bring down the balances on 1 August 2022. MC Purchases ledger control account Date Details $ Date Details $ Currently MC purchases all goods from a local supplier. He has been offered a monthly price reduction of $2000 if he changes to an annual contract purchasing all goods from a new overseas supplier. REQUIRED Advise MC whether he should change to the new overseas supplier. Justify your answer.
7707_w22_qp_22
THEORY
2022
Paper 2, Variant 2
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Questions Discovered
30