CONTROL ACCOUNT CONT’ND
IDENTIFYING THE DEBIT AND CREDIT ITEMS OF SALES LEDGER CONTROL ACCOUNT
DEBIT SIDE CREDIT SIDE
Sales (credit) Cash received from customers
Interest charge Cheque from customers
Dishonoured cheque Discount allowed
Dishonoured bill Bills receivable
Carriage outward Allowances
Discounts disallowed Bad debts
Debit note issued Return inwards
Payment to debtors for claims Credit note issued
Service charge Contra entry
SALES LEDGER CONTROL ACCOUNT SOURCE OF INFORMATION
Items Sources
Opening Debtors Debtors’ balance brought down at the end of the previous period
Credit sale Totals from sales journal
Return inwards Total from return inward journal
Cash received Cash /Cash book
Cheque received Bank /cashbook
Closing Debtors Debtors’ balance brought down at the end of the previous period
Discount allowed Cash book
Bad debt General journal
Dishonoured cheque Cashbook
Set off General journal
Bills receivable Bill receivable book
Illustration 1. You are required to prepare a sales ledger control account from the following:
N
Sales ledger balances 2000
Discount allowed 1000
Cash received from debtors 13000
Cheque received from
debtors 3000
Bad debt written off 150
Sales journal 30000
Returns inward 550
Bill receivable 1340
Solution:
Dr Sales ledger control account Cr
N N
Balance bf 2000 Cash received from debtors 13000
Sales journal 30000 Cheque from customers 3000
Discount allowed 1000
Bill receivable 1340
Bad debts 150
Return inwards 550
Balance c/d 12960
32000 32000
IDENTIFYING THE DEBIT AND CREDIT ITEMS OF PURCHASES LEDGER CONTROL ACCOUNT
DEBIT SIDE CREDIT SIDE
Cash to supplier Credit purchases
Cheque to supplier Discount received withdrawn
Return outwards Cash refund
Bill payable
Credit note received
Discount received
Contra entry
PURCHASES LEDGER CONTROL ACCOUNT SOURCE OF INFORMATION
Items Sources
Opening Creditors Creditors’ balance brought down at the end of the previous period
Credit purchases Purchases journal
Return outward Total from return outward journal
Cash paid Cash / cashbook
Cheque paid Bank / cashbook
Discount received Cashbook
Set off General journal
Bills payable Bill payable book
Illustration 2: The following balances have been extracted from the books of Eruobodo Ltd
N
Purchases ledger balance 7000
Cash paid to creditors 17000
Purchases journal 27000
Cheque paid creditors 5000
Discount received 1530
Bills payable 230
Returns outward 470
Solution:
Dr Purchases ledger control account Cr
N N
Cash to creditors 17000 Balance b/f 7000
Cheque to creditor 5000 Purchase journal 27000
Discount received 1530
Bills payable 230
Returns outward 470
Balance c/d 9770
34000 34000
Balance b/d 9770
Illustration 3: The following were extracted from the books of Kazeem Ltd for 2020
N
Purchases ledger balance 7335
Sales ledger balance 5221
Discounts received 376
Discount allowed 722
Credit note received 342
Sales Journal 60111
Purchase journal 45123
Returns outward journal 145
Returns inward journal 188
Cheque received from customers 50000
Cash refunds from a supplier overpaid 117
Cheque paid to supplier 30127
Debit note issued 370
Contra settlement 700
Credit note issued 300
Debit note
received 65
You are required to prepare
i. Total debtors control account
ii. Total creditors control account
Solution:
Dr Sales ledger control account Cr
N N
Balance bf 5211 Discount allowed 722
Credit Sales 60111 Return inwards 188
Debit note issued 370 Cheque received from customers 50000
Contra settlement 700
Credit note issued 300
Balance c/d 13797
65702 65702
Dr Purchases ledger control account Cr
N N
Discount received 376 Balance b/f 7335
Returns outward 145 Credit Purchase 45123
Cheque paid to supplier 30127 Cash refund 117
Contra entry 700 Debit note received 65
Credit note received 342
Balance c/d 20950
52640 52640
Balance b/d 20950
PREPARATION OF ACCOUNTS WHEN TWO BALANCES ARE GIVEN
ILLUSTRATION 4: The following balances were extracted from the books of Barakat Enterprises on 31st
October 2022.
N
Sales ledger balance (Dr) 9826
Sales ledger balance (Cr) 237
Purchases ledger balance (Cr) 7219
Purchases ledger balance (Dr) 421
Credit Sales 78154
Purchase journal 51362
Discount allowed 2475
Discounts received 1932
Returns inward 745
Contra settlement 622
Bill dishonoured 750
Bad debt written off 526
Bill receivable 13473
Returns outwards 892
Cash refunded to customer (debtors) 127
Cash paid to suppliers 49514
Cash received from debtors 68923
Purchases ledger balance (Dr) 334
Sales ledger balance (Cr) 201
You are required to prepare
i. Sales ledger control account
ii. Purchases ledger control account
Solution:
Dr Sales ledger control account Cr
N N
Balance bf 9826 Balance bf 237
Sales (Credit) 78154 Discount allowed 2475
Bill dishonoured 750 Contra settlement 622
Cash refund to debtors 127 Return inwards 745
Balance c/d 201 Bad debts 526
Bill receivable 13473
Cash received from debtors 68923
Balance c/d 2057
89058 89058
Balance b/d 2057 Balance b/d 201
Dr Purchases ledger control account Cr
N N
Balance b/f 421 Balance b/f 7219
Discount received 1932 Purchase (Credit) 51362
Contra entry 622 Balance b/d 334
Returns outward 892
Cash paid to suppliers 49514
Balance c/d 5534
58915 58915
Balance b/d 334 Balance b/d 5534
Assignment: Essential Financial Accounting by R.A Ibrahim & R.A Kazeem pg. 230 Ex 17.2, pg. 234 Ex17.7A, pg. 236 Ex
17.10 A