Month: February 2020

A credit balance brought down on a debtors control account cannot be explained by . . .

Select ONE answer:

1. a credit note issued to a debtor immediately after he had paid his account in full.
2. a debtor paying more than the amount owed by him.
3. unrecorded returns outwards.
4. discount allowed recorded twice in the debtors’ control account.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – A credit note being issued to a debtor immediately after he had paid his account in full would result in a credit balance on that debtor’s account and therefore, possibly, a credit balance on the debtors’ control account.
2. Not correct – A debtor paying more than the amount owed by him on his account would result in a credit balance on that debtor’s account and therefore, possibly, a credit balance on the debtors’ control account.
3. Correct – Returns outwards (purchases returns) should be recorded in the creditor control account.
4. Not correct – Discount allowed being recorded twice in the debtor control account could, if the amount was large enough relative to the amount owed by debtors, result in a credit balance on the debtor control account.

 

 

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The balance on a firm’s creditors control account at the end of an accounting period should equal . . .

Select ONE answer:

1. the total amount which the firm paid to its creditors during the period.
2. the firm’s total purchases for the period.
3. the total of its list of creditors outstanding at the end of the period.
4. the cost of the firm’s sales for the period.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – The primary purpose of a creditors’ control account is to act as a ‘control’ over the creditor ledger. The control mechanism is to compare the sum of the balances on the individual creditors’ accounts with the balance on the creditor control account.
4. Not correct

 

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The balance on a firm’s debtors control account at the end of a year should agree with . . .

Select ONE answer:

1. the total of the firm’s sales for that year.
2. the amount of money received from debtors during the year.
3. the total of debtors which are outstanding for more than one year.
4. the total of its list of debtors outstanding at the year-end.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – The primary purpose of a debtors control account is to act as a ‘control’ over the debtors (sales) ledger. The control mechanism is to compare the sum of the balances on the individual debtors’ accounts with the balance on the debtor control account.

 

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In a sales ledger control account, bad debts written off should be shown as . . .

Select ONE answer:

1. a debit.
2. a balance carried down.
3. a credit.
4. both a debit and a credit.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Debtors becoming bad debts means that less will now be collected from them than would otherwise have been the case. Therefore, the value of debtors (an asset) has been reduced. A credit entry is required to record a decrease in an asset account.
4. Not correct

 

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The total amount of money received from debtors, in addition to being recorded in the bank account, should be . . .

Select ONE answer:

1. credited to the sales account.
2. credited to the debtors’ control account.
3. debited to the debtors’ control account.
4. debited to the sales account.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – The twin effects of receiving money from debtors are that the bank balance will be increased when the money is lodged and the debtors owe less than they previously did. To increase an asset account (bank), that account must be debited (therefore, debit the bank account) and to decrease an asset account (debtors), that account must be credited (therefore credit the debtors’ control account).
3. Not correct
4. Not correct

 

This work is licensed under a Creative Commons Attribution 4.0 International License.