Before you begin:It's important for testing and exams to make sure you not only answer questions correctly but also completed them at the right speed. Grab a pen and piece of paper and time yourself while attempting this exercise.
Difficulty Rating: Intermediate --> Advanced
Time limit: 30 minutes
Q: Please prepare the debtors and creditors ledger control account for the following:
Balances: Debtors (1/1/10) 150,000 Creditors (1/1/10) 45,000 Bad debt 2,200 Discount Received 2,500 Cash Received from debtors 115,000 Cheque Receipt from debtors 5,000 Set off 1,200 Discount Allowed 1,150 Credit Sales 25,000 Credit Purchases 12,000 Cash payment to creditors 18,000 Cheque payment to creditors 11,200 Understated Credit sales 1,500 Overstated cash receipt from debtors 2,000 Return Inward 1,300 Return Outwards 1,600 Overstated Cheque payment to creditors 1,000
A: Here are the debtors and creditors control accounts:
All transactions have been assumed to have taken place in the month of January 2010.
Note that this question covers some advanced subjects such as returns (inwards and outwards) as well as bad debts. I don't cover these topics on my site. Only in my basic accounting books. Consider purchasing them if you need more info on these topics.
Hope you enjoyed the solutions here!
Best, Michael Celender Founder of Accounting Basics for Students