Sales ledger control account

Topic 11: Sales Ledger Control Account — 50 Hard MCQs

1. A sales ledger control account has the following information.

Item	$
opening trade receivables	42 000
credit sales	118 000
cash received from credit customers	96 000
sales returns	7400
discount allowed	2600
irrecoverable debts written off	1800
contra with purchases ledger	3200

What is the closing trade receivables balance?

A $48 000
B $49 000
C $51 000
D $54 000

2. A sales ledger control account has opening debit balances of $63 500 and opening credit balances of $1200. Credit sales were $186 000. Receipts from customers were $171 000. Sales returns were $5400 and discounts allowed were $3600. Closing credit balances were $900.

What are closing debit balances?

A $66 100
B $68 300
C $70 700
D $72 500

3. A business had opening trade receivables of $28 000. During the year, credit sales were $92 000 and cash received from credit customers was $84 000. Discounts allowed were $1600. Sales returns were $3400. Irrecoverable debts were $2100.

What was the closing trade receivables balance?

A $28 900
B $30 900
C $31 900
D $33 100

4. Which item is recorded on the debit side of the sales ledger control account?

A discount allowed
B cash received from credit customers
C credit sales
D sales returns

5. Which item is recorded on the credit side of the sales ledger control account?

A dishonoured cheque from customer
B interest charged to overdue customer
C credit sales
D irrecoverable debt written off

6. A cheque for $1400 received from a credit customer is dishonoured.

How is this recorded in the sales ledger control account?

A debit sales ledger control $1400
B credit sales ledger control $1400
C debit bank $1400
D credit sales $1400

7. Interest of $450 is charged to a credit customer for late payment.

How is this recorded in the sales ledger control account?

A debit sales ledger control $450
B credit sales ledger control $450
C debit discount allowed $450
D credit bank $450

8. A credit customer is also a credit supplier. The business offsets a receivable balance of $2600 against a payable balance.

How is this recorded in the sales ledger control account?

A debit sales ledger control $2600
B credit sales ledger control $2600
C debit sales $2600
D credit purchases $2600

9. Credit sales of $75 000 were posted to the sales account but omitted from the sales ledger control account.

What is the effect before correction?

A sales ledger control account balance understated
B sales ledger control account balance overstated
C sales understated
D cash book overstated

10. Cash received from credit customers, $18 000, was posted to the cash book but omitted from the sales ledger control account.

What is the effect before correction?

A trade receivables overstated
B trade receivables understated
C credit sales overstated
D discount allowed understated

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. A business has the following balances.

Item	$
opening sales ledger debit balances	50 000
credit sales	140 000
receipts from customers	132 000
sales returns	6500
discount allowed	3700
irrecoverable debts	2800
dishonoured cheques	1200

What are closing debit balances, assuming no credit balances?

A $46 200
B $47 200
C $48 200
D $50 200

12. A sales ledger control account has opening debit balances of $72 400. During the year, credit sales were $210 600. Receipts from customers were $196 000. Discounts allowed were $4100, sales returns were $7200, and a debt of $3300 was written off. A dishonoured cheque of $2500 had not yet been recorded.

What is the closing debit balance?

A $72 900
B $74 900
C $76 900
D $79 900

13. A sales ledger control account shows a closing debit balance of $84 000. The list of balances extracted from the sales ledger totals $80 700. Which error could explain the difference?

A credit sales of $3300 omitted from the control account only
B discount allowed of $3300 omitted from the control account only
C cash received of $3300 omitted from the control account only
D irrecoverable debts of $3300 omitted from the control account only

14. A sales ledger control account shows a closing balance of $56 000. Later, it is discovered that sales returns of $1500 had been omitted from the control account.

What is the corrected closing balance?

A $54 500
B $56 000
C $57 500
D $59 000

15. A sales ledger control account shows a balance of $38 600. Later, a dishonoured cheque of $900 is discovered.

What is the corrected balance?

A $37 700
B $38 600
C $39 500
D $40 400

16. A sales ledger control account includes sales tax. A credit sale of goods worth $5000 plus sales tax at 20% is made.

What amount is debited to the sales ledger control account?

A $1000
B $4000
C $5000
D $6000

17. A credit customer returns goods originally invoiced at $2400 plus sales tax at 20%.

What amount is credited to the sales ledger control account?

A $400
B $2000
C $2400
D $2880

18. Credit sales excluding sales tax were $90 000. Sales tax was 15%. Receipts from customers were $84 000. Sales returns excluding sales tax were $4000.

What is the net increase in sales ledger control before other items?

A $9500
B $10 900
C $12 900
D $17 500

19. A business writes off a debt of $1200 from a credit customer.

Which double entry is correct?

A debit irrecoverable debts, credit sales ledger control
B debit sales ledger control, credit irrecoverable debts
C debit allowance for irrecoverable debts, credit sales ledger control
D debit sales ledger control, credit allowance for irrecoverable debts

20. A previously written-off debt of $700 is recovered by cheque.

How is the recovery recorded in the sales ledger control account?

A debit sales ledger control $700
B credit sales ledger control $700
C no entry in sales ledger control account
D debit sales returns $700

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

21. Which item is not normally entered in the sales ledger control account?

A credit sales
B cash received from credit customers
C allowance for irrecoverable debts
D sales returns

22. Which item would increase the sales ledger control account balance?

A discount allowed
B interest charged to credit customers
C cash received from credit customers
D irrecoverable debts written off

23. Which item would decrease the sales ledger control account balance?

A credit sales
B dishonoured cheque
C interest charged to overdue customer
D contra entry with purchases ledger

24. A credit balance in an individual customer account is most likely caused by:

A a customer overpaying
B credit sales being made
C a customer delaying payment
D sales returns being omitted

25. In a sales ledger control account, opening credit balances are entered:

A on the debit side
B on the credit side
C only in the purchases ledger control account
D only in the income statement

26. In a sales ledger control account, closing credit balances are entered:

A on the debit side as a balance carried down
B on the credit side as a balance carried down
C on the debit side as a balance brought down
D in the sales account only

27. A business has sales ledger opening debit balances of $36 000 and opening credit balances of $800. Credit sales were $126 000. Receipts were $118 000. Discounts allowed were $2400, sales returns were $5100 and closing credit balances were $600.

What are closing debit balances?

A $35 300
B $36 300
C $36 900
D $38 500

28. A business has opening trade receivables of $65 000 and closing trade receivables of $74 000. During the year, receipts from customers were $180 000, sales returns were $6200 and discounts allowed were $3800.

What were credit sales?

A $172 000
B $179 000
C $189 000
D $199 000

29. A business has opening trade receivables of $40 000 and closing trade receivables of $52 000. Credit sales were $160 000. Sales returns were $7000, discount allowed was $3000 and irrecoverable debts were $2000.

What cash was received from credit customers?

A $136 000
B $140 000
C $148 000
D $160 000

30. A business has opening sales ledger debit balances of $82 000. Credit sales were $240 000. Receipts from credit customers were $226 000. Discounts allowed were $8000. Sales returns were $9000. Irrecoverable debts were $5000. Closing debit balances were $73 000.

What item is missing if it is a contra with purchases ledger?

A $1000
B $2000
C $3000
D $4000

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

31. A sales ledger control account has opening debit balances of $91 000 and opening credit balances of $2000. During the year, credit sales were $318 000, receipts were $292 000, discounts allowed were $6200, sales returns were $11 400, irrecoverable debts were $7800 and contra entries were $3500. Closing credit balances were $1500.

What are closing debit balances?

A $85 100
B $87 600
C $88 100
D $89 600

32. A sales ledger control account has opening debit balance $44 000. Credit sales $150 000. Receipts from customers $139 000. Discounts allowed $3100. Sales returns $4700. Irrecoverable debts $1900. Interest charged to customers $600.

What is the closing balance?

A $45 900
B $46 500
C $47 100
D $48 300

33. A sales ledger control account balance is understated by $2500.

Which error could have caused this?

A credit sales omitted from the sales ledger control account
B sales returns omitted from the sales ledger control account
C discount allowed omitted from the sales ledger control account
D cash received omitted from the sales ledger control account

34. A sales ledger control account balance is overstated by $1800.

Which error could have caused this?

A interest charged omitted from the control account
B dishonoured cheque omitted from the control account
C sales returns omitted from the control account
D credit sales understated in the control account

35. A business discovers that cash received from customers of $4200 was entered correctly in the cash book but recorded in the sales ledger control account as $2400.

What correction is required in the sales ledger control account?

A debit $1800
B credit $1800
C debit $6600
D credit $6600

36. A credit sale of $5300 was recorded in the sales journal as $3500 and posted to the sales ledger control account as $3500.

What correction is required?

A debit sales ledger control $1800
B credit sales ledger control $1800
C debit sales ledger control $8800
D credit sales ledger control $8800

37. Sales returns of $960 were recorded in the sales returns journal as $690 and posted to the sales ledger control account as $690.

What correction is required?

A debit sales ledger control $270
B credit sales ledger control $270
C debit sales returns $270
D credit sales returns $270

38. A debt of $1200 was written off but was entered in the sales ledger control account as $2100.

What correction is required in the sales ledger control account?

A debit $900
B credit $900
C debit $3300
D credit $3300

39. A contra entry of $750 was correctly recorded in the purchases ledger control account but omitted from the sales ledger control account.

What correction is required in the sales ledger control account?

A debit $750
B credit $750
C debit $1500
D credit $1500

40. A discount allowed of $420 was entered in the sales ledger control account as discount received.

What correction is required?

A debit sales ledger control $420
B credit sales ledger control $420
C credit sales ledger control $840
D no entry in sales ledger control account

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. A sales ledger control account is prepared from:

A individual customer accounts only
B books of prime entry totals
C supplier statements only
D bank reconciliation statement only

42. The total of individual customer debit balances should agree with:

A sales account
B sales ledger control account debit balance
C purchases ledger control account
D bank overdraft

43. Why is a sales ledger control account useful?

A it replaces the need to record sales
B it helps locate errors in the sales ledger
C it calculates depreciation
D it records only cash sales

44. Which account is the sales ledger control account also known as?

A trade payables control account
B trade receivables control account
C purchases account
D inventory control account

45. A debit balance in the sales ledger control account represents:

A amount owed by the business to suppliers
B amount owed by customers to the business
C cash sales made during the year
D inventory held for resale

46. A credit balance in the sales ledger control account represents:

A normal trade receivables
B customer overpayments or amounts owed to customers
C suppliers owed by the business
D irrecoverable debts expense

47. A refund of $300 is paid to a credit customer who had overpaid.

How is this recorded in the sales ledger control account?

A debit sales ledger control $300
B credit sales ledger control $300
C debit sales returns $300
D credit sales $300

48. A business receives $500 from a customer whose account previously had a credit balance of $200 and debit balance of $700.

What amount reduces the sales ledger control account debit balance?

A $200
B $300
C $500
D $700

49. A customer balance of $1000 is transferred from the sales ledger to the purchases ledger because the customer is also a supplier.

How is this recorded in the sales ledger control account?

A debit sales ledger control $1000
B credit sales ledger control $1000
C debit sales account $1000
D credit purchases account $1000

50. A business has closing debit balances of $55 000 and closing credit balances of $1700 in the sales ledger.

What amount will be shown as trade receivables in current assets?

A $53 300
B $55 000
C $56 700
D $1700

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

1. B — $49 000

• Opening trade receivables = $42 000

• Add credit sales = $118 000

• Less receipts = $96 000

• Less sales returns = $7400

• Less discount allowed = $2600

• Less irrecoverable debts = $1800

• Less contra = $3200

• Closing trade receivables = 42 000 + 118 000 – 96 000 – 7400 – 2600 – 1800 – 3200

• = $49 000

2. No correct option — correct answer is $69 200

• Closing debit balances = opening debit balances + credit sales – opening credit balances – receipts – returns – discounts + closing credit balances

• = 63 500 + 186 000 – 1200 – 171 000 – 5400 – 3600 + 900

• = $69 200

• The options need correction.

3. A — $28 900

• Closing trade receivables = 28 000 + 92 000 – 84 000 – 1600 – 3400 – 2100

• = $28 900

4. C — credit sales

• Credit sales increase trade receivables.

• Increase in receivables = debit side of sales ledger control account.

5. D — irrecoverable debt written off

• Irrecoverable debts reduce trade receivables.

• Reduction in receivables = credit side of sales ledger control account.

6. A — debit sales ledger control $1400

• Dishonoured cheque means the customer still owes the money.

• Trade receivables increase again.

• So debit sales ledger control.

7. A — debit sales ledger control $450

• Interest charged to an overdue customer increases the amount owed by the customer.

• Therefore, sales ledger control is debited.

8. B — credit sales ledger control $2600

• Contra reduces the amount receivable from the customer.

• Receivables decrease, so credit sales ledger control.

9. A — sales ledger control account balance understated

• Credit sales increase trade receivables.

• If omitted from the control account, the receivables balance is too low.

10. A — trade receivables overstated

• Cash received from customers reduces trade receivables.

• If omitted from the sales ledger control account, receivables remain too high.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. A — $46 200

• Closing debit balance = 50 000 + 140 000 + 1200 – 132 000 – 6500 – 3700 – 2800

• = $46 200

• Dishonoured cheques increase receivables, so they are added.

12. B — $74 900

• Closing balance = 72 400 + 210 600 + 2500 – 196 000 – 4100 – 7200 – 3300

• = $74 900

13. No single correct answer — B, C and D could all explain it

• Control account balance = $84 000

• List of balances = $80 700

• Difference = $3300

• The control account is too high.

• Any omitted credit item in the control account would explain this:

  • discount allowed omitted

  • cash received omitted

  • irrecoverable debts omitted

• So the MCQ needs correction.

14. A — $54 500

• Sales returns reduce trade receivables.

• Corrected balance = 56 000 – 1500

• = $54 500

15. C — $39 500

• Dishonoured cheque increases trade receivables.

• Corrected balance = 38 600 + 900

• = $39 500

16. D — $6000

• Goods value = $5000

• Sales tax = 20% × 5000 = $1000

• Total owed by customer = 5000 + 1000

• = $6000

• Sales ledger control includes the full invoice value including sales tax.

17. D — $2880

• Goods value = $2400

• Sales tax = 20% × 2400 = $480

• Total credit note value = 2400 + 480

• = $2880

18. No correct option — correct answer is $14 900

• Credit sales including sales tax = 90 000 × 1.15 = $103 500

• Sales returns including sales tax = 4000 × 1.15 = $4600

• Receipts from customers = $84 000

• Net increase = 103 500 – 84 000 – 4600

• = $14 900

• Option set needs correction.

19. A — debit irrecoverable debts, credit sales ledger control

• Writing off a debt reduces trade receivables.

• Irrecoverable debts expense increases = debit.

• Sales ledger control decreases = credit.

20. C — no entry in sales ledger control account

• The debt was already written off earlier.

• It is no longer in trade receivables.

• Recovery is recorded as:

  • debit bank

  • credit irrecoverable debts recovered

• No sales ledger control entry is needed.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

21. C — allowance for irrecoverable debts

• The allowance is not entered in the sales ledger control account.

• Sales ledger control shows gross receivables movements.

• Allowance is adjusted separately.

22. B — interest charged to credit customers

• Interest charged increases the amount owed by customers.

• Therefore, it increases the sales ledger control account balance.

23. D — contra entry with purchases ledger

• Contra reduces the amount receivable from a customer.

• It decreases the sales ledger control account balance.

24. A — a customer overpaying

• A credit balance in a customer account means the business owes the customer.

• This often happens because of overpayment or returns after payment.

25. B — on the credit side

• Opening credit balances represent amounts owed to customers.

• They are brought down on the credit side.

26. A — on the debit side as a balance carried down

• Closing credit balances are carried down on the debit side to balance the account.

• They are then brought down on the credit side next period.

27. B — $36 300

• Closing debit balances = opening debit + credit sales + closing credit – opening credit – receipts – discounts – returns

• = 36 000 + 126 000 + 600 – 800 – 118 000 – 2400 – 5100

• = $36 300

28. D — $199 000

• Credit sales = closing receivables + receipts + returns + discounts – opening receivables

• = 74 000 + 180 000 + 6200 + 3800 – 65 000

• = $199 000

29. A — $136 000

• Cash received = opening receivables + credit sales – returns – discount allowed – irrecoverable debts – closing receivables

• = 40 000 + 160 000 – 7000 – 3000 – 2000 – 52 000

• = $136 000

30. A — $1000

• Opening receivables + credit sales = 82 000 + 240 000 = $322 000

• Known reductions = 226 000 + 8000 + 9000 + 5000 = $248 000

• Balance before contra = 322 000 – 248 000 = $74 000

• Closing balance should be $73 000

• Missing contra = 74 000 – 73 000

• = $1000

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

31. B — $87 600

• Closing debit balances = opening debit + credit sales + closing credit – opening credit – receipts – discounts – returns – irrecoverable debts – contra

• = 91 000 + 318 000 + 1500 – 2000 – 292 000 – 6200 – 11 400 – 7800 – 3500

• = $87 600

32. A — $45 900

• Closing balance = 44 000 + 150 000 + 600 – 139 000 – 3100 – 4700 – 1900

• = $45 900

• Interest charged increases receivables, so it is added.

33. A — credit sales omitted from the sales ledger control account

• Credit sales should increase receivables.

• If omitted, the sales ledger control account is understated.

34. C — sales returns omitted from the control account

• Sales returns reduce receivables.

• If omitted, receivables remain too high.

• Therefore, the control account is overstated.

35. B — credit $1800

• Correct cash received = $4200

• Recorded in sales ledger control = $2400

• Further reduction needed = 4200 – 2400 = $1800

• Receivables decrease by crediting sales ledger control.

36. A — debit sales ledger control $1800

• Correct credit sale = $5300

• Recorded = $3500

• Difference = $1800

• Credit sales increase receivables, so debit sales ledger control by $1800.

37. B — credit sales ledger control $270

• Correct sales returns = $960

• Recorded = $690

• Difference = $270

• Sales returns reduce receivables, so credit sales ledger control by $270.

38. A — debit $900

• Debt written off should have credited sales ledger control by $1200.

• It was credited by $2100.

• Receivables were reduced too much by $900.

• Correct by debiting sales ledger control $900.

39. B — credit $750

• Contra reduces receivables.

• Sales ledger control should be credited by $750.

40. D — no entry in sales ledger control account

• Discount allowed should reduce receivables.

• If the amount was entered in the sales ledger control account on the correct side but merely labelled incorrectly, the control account balance is unaffected.

• Correction would be needed in the discount accounts, not the sales ledger control account.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. B — books of prime entry totals

• Sales ledger control account is prepared from totals in books of prime entry.

• It is not prepared by adding individual customer accounts.

42. B — sales ledger control account debit balance

• The total of individual customer debit balances should agree with the debit balance on the sales ledger control account.

43. B — it helps locate errors in the sales ledger

• Control accounts check the accuracy of ledger balances.

• If the control account does not agree with the list of balances, an error exists.

44. B — trade receivables control account

• Sales ledger control account is also called trade receivables control account.

45. B — amount owed by customers to the business

• A debit balance in the sales ledger control account represents trade receivables.

46. B — customer overpayments or amounts owed to customers

• Credit balances in the sales ledger are abnormal balances.

• They usually mean customers have overpaid or are owed refunds.

47. A — debit sales ledger control $300

• Refund paid to a customer reduces the amount owed to that customer.

• Credit balance decreases, so debit sales ledger control.

48. C — $500

• Customer pays $500.

• Cash received reduces the amount owed by the customer.

• Sales ledger control debit balance is reduced by the amount received: $500

49. B — credit sales ledger control $1000

• Transfer/contra reduces the amount receivable from the customer.

• Sales ledger control is credited.

50. B — $55 000

• Closing debit balances are shown as trade receivables in current assets.

• Closing credit balances are normally shown separately as current liabilities.

• Do not net them off unless specifically required.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.