Control
Accoun
1
1 Vijay Singh maintains a full set of accounting records and prepares control
accounts at the end of each month.
He provided the following information.
REQUIRED
(a) Select the relevant figures and prepare Vijay Singh’s sales ledger control
account for the month ended 30 April 2015.
Vijay Singh
Sales ledger control account
2
(b) Explain the contra entry to the purchases ledger.
(c) Suggest why Vijay Singh charged a credit customer interest.
(d) State one reason why Vijay Singh prepares a monthly sales ledger control
account.
(e) State two reasons why Vijay Singh does not use the information contained
in the sales ledger to prepare the sales ledger control account.
2 (a) Where is discount received shown?
(b) Why is inventory valued at net realisable value when this is lower than cost?
3
3 Kriti provided the following information.
REQUIRED
(a) Calculate Kriti’s purchases for the year.
(b) Prepare the sales ledger control account for the year ended 31 December
2014. Balance the account and bring down the balance on 1 January 2015. See
next page.
4
Kriti
Sales ledger control account
(c) State two reasons why Kriti maintains a sales ledger control account.
(d) State one reason why a credit balance on a sales ledger control account can
arise.
(e) State why a sales ledger control account does not contain an entry for a
provision for doubtful debts.
5
4 Esme provided the following information.
At 1 January 2014 $
Trade payables 7 000
Trade receivables 9
500 For the year ended 31
December 2014
Sales (all credit) 95
100
Sales returns 1 050
Purchases (all credit) 63
600
Purchases returns 1 950
Receipts from credit 92
customers 750
Payments to credit suppliers 59
000
Refund to credit customer 450
Discount allowed 2 100
Discount received 850
Bad debt written off 300
Additional information at 31 December 2014
1 Esme owed $100 to a supplier who also owed $180 to Esme. It was
agreed to record this as a setoff in the control accounts.
2 Esme owed $50 to a credit customer who had overpaid.
REQUIRED
(a) Prepare the sales ledger control account and the purchases ledger control
account for the year. Balance the accounts and bring down the balances on 1
January 2015. See next page.
6
7
(b) State one reason why Esme maintains a sales ledger control account.
(c) State why the discount allowed was given.
5 The sales journal for March 2017 was destroyed, but Waheed was able to provide
the following information.
REQUIRED
(a) Select the relevant figures and prepare the sales ledger control account for
the month of March 2017. Insert a figure for credit sales.
Balance the account and bring down the balances on 1 April 2017. See next page.
8
(b) Suggest two reasons why the sales ledger control account had a credit
balance on 1 April 2017.
1 ...............................................................................................................................
.................
..................................................................................................................................
.................
2 ...............................................................................................................................
.................
..................................................................................................................................
............
9
6 Simran had further transactions in the period 2 February to 28 February 2017.
These were as follows:
10
7 Which item would be recorded as a credit entry in a purchases ledger control
account?
8 Kumu purchases goods for resale on both cash and credit terms.
Kumu’s credit suppliers allow 30 days for payment of invoices.
Kumu provided the following information for the year ended 30 April 2018.
REQUIRED
(a) Select the relevant items and prepare the purchases ledger control account
for the year ended 30 April 2018. Insert the amount paid to credit suppliers. See
next page.
Kumu
Purchases ledger control account
11
(b) State the formula for calculating the trade payables payment period.
.........................................................................................................................................
..........
.........................................................................................................................................
......
(c) Calculate the trade payables payment period for the year ended 30 April
2018. Round up your answer to the next whole day.
.........................................................................................................................................
..........
.........................................................................................................................................
..........
.........................................................................................................................................
..........
.........................................................................................................................................
...........
(d) State whether Kumu’s suppliers would be satisfied with her trade payables
payment period.
Give a reason for your answer.
Satisfied? ........................................................................................................................
...........
Reason ............................................................................................................................
..........
.........................................................................................................................................
..........
.........................................................................................................................................
......
(e) State two problems Kumu may face if her trade payables payment period is
unsatisfactory.
1.......................................................................................................................................
..........
.........................................................................................................................................
12
..........
2.......................................................................................................................................
..........
.........................................................................................................................................
......
13
9 Which item appears on the debit side of a sales ledger control account?
10 Where are bad debts recorded in the control accounts?
11 Jared buys goods from Winston. On 1 August 2016 Jared owed Winston $300.
During August 2016 the following took place.
REQUIRED
(a) Prepare Jared’s account in Winston’s sales ledger for the month of August
2016. Balance the account and bring down the balance on 1 September 2016. See
next page.
14
Winston also buys goods from Jared and on 31 August 2016 he owed Jared $40.
Winston decided to make a contra entry on 1 September 2016 to set off the
accounts in the sales and purchases ledgers.
REQUIRED
(b) State the double entry needed to set off the accounts.
(c) Name the accounting term Winston uses for his partially finished products.
.........................................................................................................................................
.....
15
(d) Complete the following table, indicating with a tick (✓) where each item
would appear in Winston’s financial statements. The first has been completed as an
example.
12 Amira’s financial year ends on 30 September. She buys and sells on both cash and
credit terms and maintains a full set of accounting records.
Control accounts are prepared at the end of each
month. REQUIRED
(a) Name the book of prime (original) entry which Amira would use to obtain
the following information when preparing her sales ledger control account.
(b) State two reasons why Amira prepares a purchases ledger control account.
1 ....................................................................................................................................
.......
.........................................................................................................................................
..........
2 ....................................................................................................................................
.......
.........................................................................................................................................
16
.....
17
Amira provided the following information for September 2016.
REQUIRED
(c) Select the relevant figures and prepare the purchases ledger control account for
the month of September. Balance the account and bring down the balances on 1
October 2016. See next page.
18
(d) Suggest one advantage of paying credit suppliers before the due date.
.........................................................................................................................................
..........
.........................................................................................................................................
.....
(e) Suggest one disadvantage of paying credit suppliers before the due date.
........................................................................................................................................
...........
.........................................................................................................................................
.....
19
13 Which statement is true about a sales ledger control account?
14 How do discount received and sales ledger contras appear in a purchases
ledger control account?
15 Paul is a trader. He maintains a full set of accounting records. His ledger is divided
into a sales ledger, a purchases ledger and a nominal (general) ledger.
REQUIRED
(a) State one advantage of dividing the ledger into these three sections.
.........................................................................................................................................
..........
.........................................................................................................................................
......
(b) Name the ledger in which each of the following accounts would appear.
(i) J Smithson, a credit supplier, account...................................ledger
(ii) Sales returns account......................................ledger
(iii) Discount allowed account.....................................ledger
20