Control accounts: sales ledger control, purchases ledger control, missing figures, contra entries, dishonoured cheques

1. The opening balance of a Sales Ledger Control Account was $18 400. During the month: credit sales $52 000, cash received from customers $46 800, sales returns $2200, discounts allowed $1000. The closing balance was?

A $20 400
B $20 800
C $21 000
D $22 400

2. The Sales Ledger Control Account shows:

Opening balance $24 000
Credit sales $68 000
Cash received $59 500
Sales returns $3100
Discount allowed $1400
Closing balance $26 000

What is the value of irrecoverable debts written off?

A $2000
B $1800
C $2200
D $2400

3. A dishonoured cheque from a customer should be entered in the Sales Ledger Control Account as:

A Debit control account
B Credit control account
C Debit bank account only
D Credit sales account

4. Which item is entered on the credit side of the Sales Ledger Control Account?

A Credit sales
B Dishonoured cheque
C Sales returns
D Cash received from customers

5. Which item appears on the debit side of the Purchases Ledger Control Account?

A Credit purchases
B Cash paid to suppliers
C Purchases returns
D Opening balance of payables

6. Opening trade receivables were $12 600. Credit sales were $40 000. Cash received was $35 500. Sales returns were $1100. Discounts allowed were $700. What was the closing balance?

A $15 300
B $15 600
C $16 000
D $17 300

7. Opening trade payables were $18 500. Credit purchases were $57 000. Cash paid to suppliers was $49 800. Purchases returns were $2300. Discounts received were $900. What was the closing balance?

A $22 500
B $22 300
C $21 800
D $20 600

8. Which transaction increases the balance on the Sales Ledger Control Account?

A Cash received from customers
B Discount allowed
C Dishonoured cheque
D Sales returns

9. Which transaction decreases the balance on the Purchases Ledger Control Account?

A Credit purchases
B Interest charged by supplier
C Purchases returns
D Dishonoured cheque received from customer

10. A customer who owes $900 is also a supplier to whom $300 is owed. The balances are set off. What is the entry in the control accounts?

A Debit SLCA $300, Credit PLCA $300
B Debit PLCA $300, Credit SLCA $300
C Debit SLCA $900, Credit PLCA $900
D No entry 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.

11. Opening receivables $20 000. Closing receivables $24 000. Credit sales $70 000. Sales returns $3000. Discounts allowed $1200. Irrecoverable debts $800. What was cash received?

A $61 000
B $61 800
C $62 000
D $63 000

12. Opening payables $16 500. Closing payables $19 000. Credit purchases $64 000. Purchases returns $2500. Discounts received $1500. What was cash paid?

A $57 500
B $57 000
C $58 000
D $60 500

13. Which item appears in both a Sales Ledger Control Account and a customer’s personal account?

A Total credit sales
B Cash received from customer
C Total sales returns
D Total discounts allowed

14. Why is a Sales Ledger Control Account prepared?

A To calculate gross profit
B To check accuracy of sales ledger accounts
C To calculate inventory value
D To prepare a bank reconciliation statement

15. Which balance should normally appear on the Sales Ledger Control Account?

A Credit balance
B Debit balance
C Nil balance
D Either debit or credit equally likely

16. Which balance should normally appear on the Purchases Ledger Control Account?

A Debit balance
B Nil balance
C Credit balance
D Cash balance

17. Opening receivables $14 000. Credit sales $55 000. Cash received $49 000. Discounts allowed $1200. Sales returns $1800. Dishonoured cheque $400. What is closing receivables?

A $17 400
B $17 000
C $18 200
D $19 400

18. Opening payables $25 000. Credit purchases $80 000. Cash paid $74 000. Discounts received $2000. Purchases returns $1500. What is closing payables?

A $27 500
B $28 000
C $27 000
D $26 500

19. A customer’s cheque for $700 is dishonoured. What effect does this have on trade receivables?

A Decrease by $700
B Increase by $700
C No effect
D Increase by $1400

20. Which item is not usually included in a Sales Ledger Control Account?

A Credit sales
B Discounts allowed
C Cash sales
D Sales returns

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. The total of individual customer balances is $32 400. The Sales Ledger Control Account balance is $31 800. What does this suggest?

A The control account is definitely correct
B There is at least one error in the sales ledger or control account
C Gross profit is understated
D Purchases ledger contains an error

22. Which item increases the Purchases Ledger Control Account balance?

A Cash paid to suppliers
B Purchases returns
C Discount received
D Credit purchases

23. A credit purchase of $1200 was omitted from the Purchases Ledger Control Account but correctly entered in the supplier account. Effect?

A Control account understated by $1200
B Control account overstated by $1200
C Supplier account understated by $1200
D No effect

24. Which item is entered on the credit side of the Purchases Ledger Control Account?

A Cash paid
B Purchases returns
C Credit purchases
D Discount received

25. Opening receivables $10 000. Closing receivables $14 500. Credit sales $48 000. Cash received $40 000. Discounts allowed $1000. Find sales returns.

A $2500
B $3000
C $3500
D $4000

26. Opening payables $12 000. Closing payables $15 500. Credit purchases $50 000. Cash paid $42 000. Purchases returns $1000. Find discounts received.

A $3500
B $3000
C $2500
D $2000

27. Which item is added to the Sales Ledger Control Account because it reverses a previous reduction?

A Discount allowed
B Sales returns
C Dishonoured cheque
D Cash received

28. A contra entry between a customer and supplier reduces:

A Receivables only
B Payables only
C Both receivables and payables
D Neither receivables nor payables

29. Which item appears on the debit side of the Sales Ledger Control Account?

A Credit sales
B Dishonoured cheque
C Opening receivables
D All of the above

30. Which item appears on the debit side of the Purchases Ledger Control Account?

A Cash paid
B Discounts received
C Purchases returns
D Opening payables balance

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. Credit sales during the year were $250 000. Cash received from customers was $220 000. Discounts allowed $5000. Sales returns $3000. Opening receivables $18 000. Closing receivables?

A $40 000
B $39 000
C $38 000
D $37 000

32. Credit purchases $190 000. Cash paid $170 000. Discounts received $4000. Purchases returns $3000. Opening payables $22 000. Closing payables?

A $35 000
B $34 000
C $33 000
D $36 000

33. Which item would cause the balance on the Sales Ledger Control Account to be larger than expected?

A Customer overpayment not recorded
B Sales returns omitted
C Cash received recorded twice
D Discount allowed recorded twice

34. Which item would cause the balance on the Purchases Ledger Control Account to be understated?

A Credit purchases omitted
B Cash paid omitted
C Purchases returns omitted
D Interest charged by supplier omitted

35. The balance on the Sales Ledger Control Account is larger than the total of individual customer balances. Which error could explain this?

A A customer account omitted a credit sale
B Sales Ledger Control Account omitted a credit sale
C Customer account omitted a receipt from customer
D Control account omitted a dishonoured cheque

36. A customer owing $1800 paid $1700 in full settlement. What entry appears in the Sales Ledger Control Account?

A Credit bank $1700 and credit discounts allowed $100
B Credit bank $1800 and debit discounts allowed $100
C Credit bank $1700 and credit receivables $100
D Debit discounts allowed $100 and credit control account $1800

37. A supplier was owed $1400. The business paid $1330 in full settlement. What entry affects the Purchases Ledger Control Account?

A Debit control account $1400
B Debit control account $1330 only
C Credit discounts received $70 only
D Debit bank $1330 only

38. Which account is most useful for finding missing credit sales?

A Purchases Ledger Control Account
B Cash Book
C Sales Ledger Control Account
D Petty Cash Book

39. Which item should be excluded when calculating closing receivables from the Sales Ledger Control Account?

A Credit sales
B Cash sales
C Discounts allowed
D Sales returns

40. Which item should be excluded when calculating closing payables from the Purchases Ledger Control Account?

A Credit purchases
B Purchases returns
C Cash paid
D Cash purchases

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 dishonoured cheque of $500 was omitted from the Sales Ledger Control Account. Effect?

A Receivables understated by $500
B Receivables overstated by $500
C No effect
D Receivables understated by $1000

42. Which transaction appears in both Sales Ledger Control Account and Purchases Ledger Control Account?

A Credit sale
B Credit purchase
C Contra between customer and supplier
D Sales return

43. Opening receivables $30 000. Closing receivables $35 000. Credit sales $120 000. Cash received $105 000. Discounts allowed $4000. Dishonoured cheques $1000. Find sales returns.

A $7000
B $6000
C $5000
D $4000

44. Opening payables $28 000. Closing payables $32 000. Credit purchases $110 000. Cash paid $95 000. Purchases returns $5000. Discounts received $3000. Find interest charged by suppliers.

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

45. Which statement about control accounts is correct?

A They replace personal accounts.
B They are prepared from personal accounts.
C They act as an independent check on personal ledger accuracy.
D They are only prepared at year end.

46. If the Sales Ledger Control Account balance exceeds the total of customer balances by $800, which error may exist?

A A customer receipt omitted from a customer account
B A customer receipt omitted from the control account
C A credit sale omitted from the control account
D A sales return omitted from the control account

47. Which transaction increases trade receivables but not sales?

A Credit sale
B Dishonoured cheque
C Cash sale
D Sales return

48. Which transaction decreases trade payables but is not a cash payment?

A Credit purchase
B Interest charged by supplier
C Purchases return
D Dishonoured cheque

49. Which transaction affects both control accounts equally?

A Credit sales
B Credit purchases
C Contra entry
D Dishonoured cheque

50. The primary purpose of a control account is:

A To calculate profit
B To calculate capital
C To provide an independent check on the accuracy of personal ledger accounts
D To replace the trial balance

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
   Opening 18 400 + Sales 52 000 = 70 400
   Less: Cash 46 800, Returns 2200, Discounts 1000
   Closing balance = 20 400

2. B
   24 000 + 68 000 − 59 500 − 3100 − 1400 − X = 26 000
   X = 1800

3. A
   Dishonoured cheque increases the amount owed by the customer.
   Debit Sales Ledger Control Account.

4. D
   Cash received reduces receivables and is credited.

5. D
   Opening trade payables are normally a credit balance and appear on the debit side of the control account to balance it.

6. A
   12 600 + 40 000 − 35 500 − 1100 − 700 = 15 300

7. A
   18 500 + 57 000 − 49 800 − 2300 − 900 = 22 500

8. C
   Dishonoured cheque reverses a previous receipt and increases receivables.

9. C
   Purchases returns reduce the amount owed to suppliers.

10. B
    Debit Purchases Ledger Control $300
    Credit Sales Ledger Control $300

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. B
    20 000 + 70 000 − Cash − 3000 − 1200 − 800 = 24 000
    Cash = 61 000

12. A
    16 500 + 64 000 − Cash − 2500 − 1500 = 19 000
    Cash = 57 500

13. B
    Cash received appears in both the customer’s account and the control account.

14. B
    Control accounts provide an independent check on personal ledger accuracy.

15. B
    Trade receivables normally have a debit balance.

16. C
    Trade payables normally have a credit balance.

17. A
    14 000 + 55 000 + 400 − 49 000 − 1200 − 1800 = 17 400

18. A
    25 000 + 80 000 − 74 000 − 2000 − 1500 = 27 500

19. B
    Dishonoured cheque restores the debt.

20. C
    Cash sales never enter 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.

21. B
    Control account and total customer balances should agree. Difference indicates an error.

22. D
    Credit purchases increase amounts owed to suppliers.

23. A
    Control account is missing the purchase entry and is understated.

24. C
    Credit purchases are entered on the credit side.

25. B
    10 000 + 48 000 − 40 000 − 1000 − Returns = 14 500
    Returns = 2500

26. D
    12 000 + 50 000 − 42 000 − 1000 − Discount = 15 500
    Discount = 3500

27. C
    Dishonoured cheque reverses a reduction in receivables.

28. C
    A contra reduces both receivables and payables.

29. D
    Opening balance, credit sales and dishonoured cheques all appear on the debit side.

30. D
    Opening payables balance appears on the debit side.

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
    18 000 + 250 000 − 220 000 − 5000 − 3000 = 40 000

32. A
    22 000 + 190 000 − 170 000 − 4000 − 3000 = 35 000

33. B
    If sales returns are omitted, receivables stay too high.

34. A
    Missing credit purchases means payables are understated.

35. C
    Receipt omitted from customer account leaves customer balances too high relative to control.

36. D
    Debit discounts allowed $100
    Credit control account $1800
    (with bank $1700 credited separately)

37. A
    Supplier account must be cleared by $1400 in total.

38. C
    The Sales Ledger Control Account is useful for finding missing credit sales.

39. B
    Cash sales do not affect receivables.

40. D
    Cash purchases do not affect payables.

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
    Dishonoured cheque omitted means receivables are too low by $500.

42. C
    A contra affects both control accounts.

43. A
    30 000 + 120 000 + 1000 − 105 000 − 4000 − Returns = 35 000
    Returns = 7000

44. C
    28 000 + 110 000 + Interest − 95 000 − 5000 − 3000 = 32 000
    Interest = 1000

45. C
    Control accounts provide an independent check on ledger accuracy.

46. A
    Customer receipt omitted from customer account leaves personal balances higher than control.

47. B
    Dishonoured cheque increases receivables without creating a new sale.

48. C
    Purchases returns reduce payables without any cash payment.

49. C
    Contra entries affect both control accounts.

50. C
    The primary purpose is to independently verify the accuracy of personal ledger accounts.

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.