Control Accounts (Copy)
Topic 3.4: Control Accounts – Quiz
O Level and IGCSE Accounting
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
1. What is the purpose of control accounts?
A. To record all petty cash transactions
B. To summarise the total of individual ledger accounts
C. To adjust for errors in financial statements
D. To calculate gross profit
2. A purchases ledger control account summarises:
A. Customer transactions
B. Supplier transactions
C. Asset depreciation
D. Inventory adjustments
3. A sales ledger control account is also known as:
A. Creditors’ control account
B. Petty cash control account
C. Debtors’ control account
D. Trial balance
4. Which of the following would be recorded in the purchases ledger control account?
A. Credit sales
B. Credit purchases
C. Receipts from customers
D. Dishonoured cheques from customers
5. Which of the following would be recorded in the sales ledger control account?
A. Payments to suppliers
B. Cash discount allowed to customers
C. Credit purchases
D. Irrecoverable debts paid
6. What is the effect of a dishonoured cheque on the sales ledger control account?
A. Decrease balance
B. No effect
C. Increase balance
D. Transfer to purchases ledger
7. What type of balance would you normally expect in the purchases ledger control account?
A. Debit
B. Credit
C. Zero
D. Contra
8. What is a contra entry in control accounts?
A. A sales return from supplier
B. A discount from customer
C. Offset between a supplier and customer account
D. Return of petty cash
9. Where does the information for control accounts come from?
A. Statement of financial position
B. Books of prime entry
C. Income statement
D. Ledger accounts only
10. The source document for recording credit sales in the sales ledger control account is:
A. Sales return note
B. Receipt
C. Invoice
D. Bank statement
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
11. How is a cash discount allowed to a customer recorded in the sales ledger control account?
A. Debit control account
B. Credit control account
C. No entry
D. Debit sales account
12. How is an irrecoverable debt written off treated in the sales ledger control account?
A. Debit control account
B. Credit control account
C. No entry
D. Debit drawings
13. Interest charged on overdue accounts is recorded as:
A. Debit sales ledger control account
B. Credit purchases ledger control account
C. Debit purchases ledger control account
D. Credit sales ledger control account
14. A refund made to a customer should be:
A. Debited to sales ledger control account
B. Credited to purchases ledger
C. Debited to purchases ledger control account
D. Credited to sales ledger control account
15. What does the opening balance in the sales ledger control account usually represent?
A. Amount owed to suppliers
B. Debts owed by customers
C. Inventory balance
D. Bank balance
16. A debit balance in purchases ledger control account would mean:
A. Business owes supplier
B. Customer owes business
C. Supplier has overpaid or returns exceeded payables
D. Sales are too high
17. Cash received from customers is:
A. Debited to sales ledger control account
B. Credited to sales ledger control account
C. Credited to purchases ledger control account
D. Debited to income account
18. A contra entry will:
A. Increase both ledgers
B. Decrease both ledgers
C. Cancel amounts in sales and purchases ledger
D. Affect only the trial balance
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
19. Which of the following would decrease the balance in the purchases ledger control account?
A. Credit purchases
B. Payments to suppliers
C. Interest charged on overdue accounts
D. Dishonoured cheque
20. What is the double entry for writing off a debt?
A. Debit bank, credit sales ledger control
B. Debit sales ledger control, credit bad debts
C. Debit bad debts, credit sales ledger control
D. Debit sales, credit customer
21. Sales returns are entered in sales ledger control account as:
A. Debit entry
B. Credit entry
C. No entry
D. Contra entry
22. Which transaction will not appear in the purchases ledger control account?
A. Credit purchase
B. Payment to supplier
C. Cash purchase
D. Purchase return
23. What kind of entry is made for a discount received from supplier?
A. Debit sales ledger
B. Credit sales ledger
C. Debit purchases ledger control account
D. Credit purchases ledger control account
24. A credit balance in the sales ledger control account means:
A. Debtor overpaid
B. Normal balance
C. Incorrect entry
D. Business owes supplier
25. Which of the following increases the balance in sales ledger control account?
A. Receipts from customers
B. Cash discounts allowed
C. Irrecoverable debts
D. Credit sales
**26. A journal entry shows:
Debit: Purchases ledger control
Credit: Sales ledger control
This entry indicates:**
A. A refund to customer
B. A contra entry
C. Irrecoverable debt
D. Return to supplier
27. Which of the following transactions reduces purchases ledger control account balance?
A. Interest on overdue
B. Refund to supplier
C. Payment made to supplier
D. Credit purchase
28. A balance b/d on the debit side of the sales ledger control account represents:
A. Amount owed by customer
B. Amount owed to customer
C. Bad debt
D. Refund payable
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
29. Credit purchases are posted from which book of prime entry?
A. Cash book
B. Sales journal
C. Purchases journal
D. General journal
30. The closing balance of the sales ledger control account shows:
A. What the business owes suppliers
B. The profit earned
C. The total amount owed by credit customers
D. The bank overdraft
Answer key and explanations
Topic 3.4 – Control Accounts
O Level and IGCSE Accounting
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
1. Correct Answer: B
Explanation: Control accounts summarise the totals of individual accounts in the sales and purchases ledgers to simplify monitoring.
2. Correct Answer: B
Explanation: The purchases ledger control account summarises all transactions with credit suppliers.
3. Correct Answer: C
Explanation: The sales ledger control account is also called the debtors’ control account because it summarises amounts owed by customers.
4. Correct Answer: B
Explanation: Credit purchases are recorded in the purchases ledger control account as these involve suppliers.
5. Correct Answer: B
Explanation: Cash discounts allowed reduce the amount owed by customers and are recorded in the sales ledger control account.
6. Correct Answer: C
Explanation: When a cheque is dishonoured, the amount is re-added to the customer’s debt, increasing the balance.
7. Correct Answer: B
Explanation: The normal balance of the purchases ledger control account is a credit, as it represents amounts owed to suppliers.
8. Correct Answer: C
Explanation: A contra entry occurs when the same party is both a supplier and a customer, so balances are offset.
9. Correct Answer: B
Explanation: Control accounts are prepared using summaries from books of prime entry like journals and the cash book.
10. Correct Answer: C
Explanation: Credit sales are recorded using sales invoices, which serve as the source document.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course
11. Correct Answer: B
Explanation: Discounts allowed reduce customer balances, so they are credited in the sales ledger control account.
12. Correct Answer: B
Explanation: Irrecoverable debts are credited to reduce the customer’s balance in the sales ledger control account.
13. Correct Answer: A
Explanation: Interest charged increases the amount the customer owes, so it’s debited to the sales ledger control account.
14. Correct Answer: A
Explanation: Refunds to customers are treated as payments made to them, so the sales ledger control account is debited.
15. Correct Answer: B
Explanation: The opening balance usually represents the total amount owed by credit customers at the start of the period.
16. Correct Answer: C
Explanation: A debit balance in purchases ledger means a supplier has been overpaid or returns have exceeded amounts owed.
17. Correct Answer: B
Explanation: Receipts reduce customer balances, so they are credited in the sales ledger control account.
18. Correct Answer: C
Explanation: A contra entry offsets an amount in the sales ledger with an amount in the purchases ledger, cancelling both.
19. Correct Answer: B
Explanation: Payments to suppliers reduce the business’s liability, hence reduce the purchases ledger control account balance.
20. Correct Answer: C
Explanation: Bad debts are expenses → Debit Bad Debts, Credit Sales Ledger Control to remove the customer’s balance.
21. Correct Answer: B
Explanation: Sales returns reduce the customer’s debt and are credited in the sales ledger control account.
22. Correct Answer: C
Explanation: Cash purchases are not on credit, so they do not go through the purchases ledger control account.
23. Correct Answer: D
Explanation: Discounts received reduce amounts payable, and are credited in the purchases ledger control account.
24. Correct Answer: A
Explanation: A credit balance in the sales ledger means the customer overpaid or received a refund.
25. Correct Answer: D
Explanation: Credit sales increase what customers owe, and hence increase the balance in the sales ledger control account.
26. Correct Answer: B
Explanation: This is a contra entry: reducing both control accounts when one person is both supplier and customer.
27. Correct Answer: C
Explanation: A payment to the supplier reduces the amount owed and decreases the purchases ledger control account.
28. Correct Answer: A
Explanation: A debit balance b/d on the sales ledger control account means that the customer owes the business money.
29. Correct Answer: C
Explanation: Credit purchases are recorded in the purchases journal before being posted to the control account.
30. Correct Answer: C
Explanation: The closing balance in the sales ledger control account shows the total outstanding amount owed by credit customers.
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Accounting Full Scale Course