1

2 Raheem is a trader who makes all his sales on credit. He prepared the following sales ledger
control account for the month of December 2015:

$ $
Balance b/d 22 380 Sales returns journal 1 440
Sales journal 16 910 Bank 17 380
Balance c/d 20 470
39 290 39 290
Balance b/d 20 470

Raheem extracted a list of customer account balances from the sales ledger at
31 December 2015 totaling $18 740. This did not agree with the balance on the control account.

The following errors were found:

1 A sales invoice for $960 had been correctly recorded in the sales journal, but had not been
posted to the customer’s ledger account.

2 A customer’s irrecoverable debt of $250 had not been written off in any of Raheem’s books
of account.

3 A cheque received, $670, from a customer had been correctly recorded in the cash book. It
had been entered on the debit side of the customer’s ledger account as $760.

4 A cheque received, $200, from a customer had been returned unpaid by the customer’s
bank. No entry in respect of the returned cheque had been made in any of Raheem’s books
of account.

5 Discounts allowed of $830 had not been entered in the control account. They had been
entered in the customers’ ledger accounts.

6 A contra to the purchases ledger of $1370 had been entered in the customer’s sales ledger
account, but had not been included in the control account.

REQUIRED

(a) Prepare the updated sales ledger control account for the month of December 2015. Start
your answer with the balance brought down of $20 470.

Sales ledger control account

[5]

9706/21/O/N/16
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 2

(b) Prepare a statement to reconcile the original total of sales ledger balances of $18 740 with
the closing balance on the amended sales ledger control account.

[5]

(c) State three advantages to a business of maintaining a sales ledger control account.

[3]

(d) State two types of errors that will not be identified by producing a sales ledger control
account.

[2]

[Total: 15]

9706/21/O/N/16
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 3

3 Meena did not keep full accounting records. She was advised to keep her books of account using
the double entry system.

REQUIRED

(a) State three benefits a business gains from maintaining a system of double entry
book-keeping.

[3]

Additional information

Meena now uses the double entry system of book-keeping. At the end of January the total of the
balances in the sales ledger was $34 524. However, the balance on the sales ledger control
account was $33 205.

On investigation she found the following errors:

1 The sales journal had been undercast by $1649.

2 A cheque received had been correctly entered in the cash book as $650 but was entered in
the sales ledger as $560.

3 An irrecoverable debt, $420, had been written off in the sales ledger but not entered in the
control account.

4 A credit note issued for $160 had been completely omitted from the books of account.

9706/21/M/J/17
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 4

REQUIRED

(b) Prepare a reconciliation between the sales ledger control account and the sales ledger
balances at 31 January.

Sales ledger control account

Description Add ($) Less ($) Total ($)

Opening balance 33 205

Sales ledger balances

Description Add ($) Less ($) Total ($)

Opening balance 34 524

[6]

9706/21/M/J/17
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 5

(c) State three reasons why there might be a credit balance on a customer’s account in the
sales ledger.

[3]

Additional information

Meena is considering charging interest on the full account balances of her customers who do not
pay promptly.

REQUIRED

(d) Advise Meena whether or not she should take this course of action. Justify your answer.

[3]

[Total: 15]

9706/21/M/J/17
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 6

2 Trott provided the following information for the year ended 30 April 2017:

$
Sales ledger control account balance 93 185
Sales ledger balances 78 370

The following errors were identified:

1 The sales journal total had been overcast by $30 420.

2 A dishonoured cheque for $9745 had not been entered in the customer’s account.

3 Interest charged on an overdue amount, $720, had been completely omitted from the books
of account.

4 The sales returns journal had been overcast by $4560.

5 Discount allowed of $1520 had been completely omitted from the books of account.

6 Receipts from credit customers entered in the cash book had been overcast by $18 965.

7 An irrecoverable debt of $1825 had been written off in the sales ledger control account but
no entry had been made in the customer’s account.

REQUIRED

(a) Complete the following tables to update the sales ledger control account balance and the
sales ledger balances at 30 April 2017.

Sales ledger control account

Description Add ($) Less ($) Total ($)

Opening balance 93 185

9706/22/O/N/17
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 7

Sales ledger balances

Description Add ($) Less ($) Total ($)

Opening balance 78 370

[11]

(b) State four advantages to a business of preparing a sales ledger control account.

[4]

[Total: 15]

9706/22/O/N/17
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 8

1 Shane Limited is a small manufacturing company.

The directors provided the following information for the six months ended 31 December 2013.

$000
Trade receivables at 1 July 2013 40
Trade receivables at 31 December 2013 54
Cash received from trade receivables 3320
Sales returns 60
Bad debts 80

All sales are on credit.

REQUIRED

(a) Prepare a sales ledger control account to calculate Shane Limited’s sales for the 6 months
ended 31 December 2013

[6]

9706/21/M/J/14
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 9

1 Charles Altas does not keep books on a double-entry basis. He provided the following
information.

Charles Altas
Statement of Financial Position at 1 January 2013
$ $
Non-current assets 60 000
Current assets
Inventory 29 600
Trade receivables 33 000
Cash and cash equivalents 9 800 72 400
Total assets 132 400

Equity and liabilities

Capital at 1 January 2013 108 600
Current liabilities
Trade payables 18 200
Other payables 5 600 23 800
132 400

Additional information for the year ended 31 December 2013

$
Cheques received from credit customers 166 660
Discounts allowed 8 600
Cash takings banked 30 000
Cheques paid to credit suppliers 155 690
Discounts received 8 200
Expenses paid 26 100
Purchase of non-current assets 20 000
Returns inwards 4 200
Returns outwards 4 500
Bad debts 2 200

All cash takings were banked except for $29 000. Of this $10 000 was used to pay wages and the
remainder kept for personal use. All other payments were made by cheque.

On 31 December 2013 Charles Altas had the following assets and liabilities:
$
Non-current assets 74 000
Trade receivables 20 832
Trade payables 14 930
Inventory 35 200
Other receivables 1 720
Cash and cash equivalents 4 670

No non-current assets were disposed of during 2013.

All purchases were made on credit.

9706/22/M/J/14
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 10

REQUIRED

(a) Prepare the sales ledger control account for the year ended 31 December 2013.

[6]

(b) Prepare the purchases ledger control account for the year ended 31 December 2013.

[5]

9706/22/M/J/14
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 11

2 A The sales ledger control account of Dream Beds for the year ended 31 December 2010
is shown below.

$ $
Jan 1 Balance b/d 43 900 Dec 31 Sales returns 28 510
Dec 31 Sales 522 650 Bank 436 300
Bank (dishonoured cheques) 2 200 Discount allowed 28 800

Bad Debts 8 400

PLCA 3 210
Balance c/d 63 530
568 750 568 750

The schedule of trade receivables (debtors) extracted from the sales ledger at
31 December 2010 totalled $61 140.

The following errors were subsequently discovered:

1 A sale of $750 had been entered in John’s account in the sales ledger as
$570. The correct entry had been made in the sales journal.

2 An entry of $850 was correctly entered in Samera’s account in the sales ledger,
closing the account owing to Samera’s bankruptcy. No other entry had been
made.

3 A sum of $120 discount allowed had been debited to Beach’s account in the
sales ledger. The correct entry had been made in the cash book.

4 At 31 December 2010 the balances in Richard’s accounts were:

$
Purchases Ledger 2680 Credit
Sales Ledger 1980 Debit

It was decided to set off Richard’s balance in the sales ledger against the
balance in the purchases ledger. No entries had been made.

5 Goods to the value of $800 were sold to Claire in June 2010, and the account
had not yet been paid. Interest charges of $30 are to be applied on the overdue
account, but no entries for this had yet been recorded.

In addition a provision for doubtful debts of 10% on the new outstanding

balance is to be created.

6 Dream Beds had sent goods with a selling price of $400 on a sale or return
basis to Majit. Majit had not yet signified any intention to purchase the goods.
Dream Beds had considered the goods as sold, and made the relevant
accounting entries.

7 A page in the sales returns journal in October 2010 had been undercast by
$1600. No correction had yet been made.

9706/22/O/N/11
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 12

REQUIRED

(a) Prepare the corrected sales ledger control account for the year ended 31 December 2010.

..........................................................................................................................................

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...................................................................................................................................... [6]

(b) Prepare a statement reconciling the schedule of trade receivables (debtors) total with
the corrected balance in the sales ledger control account.

..........................................................................................................................................

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...................................................................................................................................... [8]

9706/22/O/N/11
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 13

(c) Explain two advantages of using a sales ledger control account.

(i) ..................................................................................................................................

..................................................................................................................................

..................................................................................................................................

(ii) ..................................................................................................................................

..................................................................................................................................

.............................................................................................................................. [4]

9706/22/O/N/11
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 14

2 The following information has been extracted from the accounts of Harvey Rabbit for the
year ended 31 March 2010.

$
Sales ledger balance at 1 April 2009 29 040
Credit sales 499 892
Cash sales 14 634
Credit sales returns 9 878
Receipts from debtors, banked 462 680
Discount allowed on credit sales 21 404
Bad debts written off 9 510
Debtors’ cheques dishonoured 662
Contra entries 1 153

REQUIRED

(a) Prepare Harvey Rabbit’s sales ledger control account for the year ended 31 March 2010.

..........................................................................................................................................

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....................................................................................................................................[10]

The total of Harvey Rabbit’s sales ledger balances at 31 March 2010 was $26 845, which
did not agree with the closing balance of his sales ledger control account. On checking his
accounts he discovered the following errors.

1 A credit note for $420 which had been sent to a debtor had been entered in the sales
journal (day book) and posted as a sale to both accounts.

2 A debit entry in the sales ledger for $698 had been set off as a contra entry in the
purchases ledger, but no entry had been made in the control accounts.

9706/23/M/J/10
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 15

3 The discount allowed account had been overstated by $310.

4 A sales invoice for $998 had been completely omitted from the accounts.

5 A debit balance of $2102 had been omitted from the list of debtors.

6 A debtor who owed $896 had been declared bankrupt during March 2010. The debt
had been written off in the control account, but no entry had been made in the debtor’s
account.

7 A receipt for $630 had been debited to the bank account but omitted from the debtor’s
account.

8 An entry for $816 in the sales journal (day book) had not been posted to the debtor’s
account.

9 A sales ledger account had been understated by $200.

10 A page of the sales journal (day book) with entries totalling $3856 had been omitted
from total sales. The amounts had, however, been posted to the debtors’ accounts.

REQUIRED

(b) (i) Beginning with the closing balance which you have calculated in (a), prepare a
statement showing the amended balance on the control account.

Amendments to sales ledger control account

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..............................................................................................................................[6]

9706/23/M/J/10
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 16

(ii) Beginning with Harvey Rabbit’s sales ledger balance of $26 845, prepare a
statement amending the total of the sales ledger balance to agree with the new
control account balance.

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..............................................................................................................................[8]

(c) State three advantages of keeping control accounts.

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......................................................................................................................................[6]

[Total: 30]

9706/23/M/J/10
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 17

1 Delph started trading on 1 July 2016.

For the year ended 30 June 2017 he provided the following information relating to his sales and
purchases.

$
Bank payments to credit suppliers 39 826
Cash purchases 692
Credit purchases 74 779
Credit purchases returns 6 813
Discount received 1 764

At 30 June 2017
Sales ledger control account balance 21 555 Debit

REQUIRED

(a) Explain two benefits of using control accounts.

[4]

9706/22/F/M/18
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 18

Additional information

The following book-keeping errors have been discovered in the sales ledger:

1 The sales journal total for June 2017 was understated by $1470.

2 A customer’s invoice for $2910 was entered in the sales journal as $2190.

3 Discounts allowed in June 2017 amounting to $435 were debited to the sales ledger control
account.

4 A sales invoice for $1520 dated 30 June 2017 was omitted from the sales journal.

REQUIRED

(b) Prepare the amended sales ledger control account at 30 June 2017.

Delph
Amended sales ledger control account

$ $

Balance b/d 21 555

[5]

9706/22/F/M/18
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 19

Additional information

At 30 June 2017 there was a debit balance on the purchases ledger account of $384.

REQUIRED

(c) Prepare the purchases ledger control account for the year ended 30 June 2017.

Delph
Purchases ledger control account

$ $

[5]

Additional information

Delph has also provided the following information.

At 1 July 2016 $
Capital introduced 10 500
Loan from the bank (repayable 2021) 3 000

During the year ended 30 June 2017

Bank payments
Motor vehicle 13 560
Loan 500
Drawings 12 625

At 30 June 2017
Inventory 3 700 Debit
Cash in hand 360 Debit
Rent 650 Debit
Bank 856 Credit
Wages 1 890 Credit

The motor vehicle is to be depreciated at 25% using the reducing balance method.

9706/22/F/M/18
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 20
5

REQUIRED

(d) Prepare the statement of financial position at 30 June 2017.

Delph
Statement of financial position at 30 June 2017

[9]

9706/22/F/M/18
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 21

1 Marcel owns a wholesale business supplying shops, hotels and restaurants with tea and
coffee. He does not keep formal accounting records but is able to supply the following
information for the year ended 30 April 2011.

30 April 2011 1 May 2010

$ $
Trade receivables 17 000 18 200
Trade payables 14 800 16 600
Inventories 20 600 33 000
Wages accrued 9 350 9 200
General expenses prepaid – 900
General expenses owing 800 –

Transactions during the year ended 30 April 2011 were as follows:

$
Cash received from credit customers 103 160
Cash paid to credit suppliers 88 400
Cash sales to staff 10 750
Sales returns from credit customers 9 200
Discounts allowed 9 540
Discounts received 9 000
Bad debts 8 200
Wages 13 650
General expenses 12 300

REQUIRED

(a) (i) Prepare a purchases ledger control account to find out the total amount of credit
purchases for the year ended 30 April 2011.

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..................................................................................................................................

..............................................................................................................................[5]

9706/22/M/J/11
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 22

(ii) Prepare a sales ledger control account to find out the amount of credit sales for the
year ended 30 April 2011.

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..............................................................................................................................[7]

Additional information:

1 The normal gross profit to sales margin is 33.33%.

2 Staff are permitted to buy goods at cost plus 25%.

3 Goods sold in the annual clearance sale, $29 700, were sold at cost price.

4 On 8 March 2011 an unknown quantity of goods was destroyed by fire.

9706/22/M/J/11
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 23

REQUIRED

(b) There were no further losses of goods during the year. Starting with the opening
inventory, calculate the value of the goods destroyed by the fire on 8 March 2011.

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....................................................................................................................................[11]

9706/22/M/J/11
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni
 24

(c) Prepare the income statement (trading account only) for the year ended 30 April 2011.

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......................................................................................................................................[7]

[Total: 30]

9706/22/M/J/11
AS ACCOUNTING - CONTROL ACCOUNTS Ms. Noha Hosni