Month: March 2020

The following information relates to a firm’s most recent accounting period.

• Debtors at 1 January £8,000
• Transactions for the period. 1 January to 31 December
  • Discount allowed £1,000
  • Credit sales £89,000
  • Receipts from debtors £80,000
  • Cash sales £6,000
  • Returns inwards £6,000

The balance on the firm’s debtors control account at 31 December was?

Select ONE answer:

1. £3,000
2. £10,000
3. £11,000
4. £17,000

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
3. Not correct
4. Not correct

Answer 2:

Cash sales are not relevant to the debtors control account

Debtors
Dr Balance b/d £8,000
Dr Sales (Credit) £89,000
Dr Totals £97,000
Cr Bank £80,000
Cr Bad Debts £0
Cr Discount Allowed £1,000
Cr Returns Inwards £6,000
Cr Balance c/d £10,000
Cr Totals £97,000

 

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The following information relates to a firm whose policy is to maintain a provision for bad and doubtful debts equal to 5% of its debtors.

• Balances at 1 January
• Debtors £10,000
• Provision for bad and doubtful debts £500
• Transactions for the period 1 January to 31 December
  • Credit sales £30,000
  • Cash sales £5,000
  • Receipts from credit customers £25,000
  • Bad debts written off £1,000

The balance on the firm’s debtors control account at 31 December is?

Select ONE answer:

1. £13,300
2. £14,000
3. £14,250
4. £15.000

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
3. Not correct
4. Not correct

Answer 2:

Neither the provision for bad and doubtful debts or the cash sales are relevant to the debtors control account
.
Debtors
Dr Balance b/d £10,000
Dr Sales (Credit) £30,000
Dr Totals £40,000
Cr Bank £25,000
Cr Bad Debts £1,000
Cr Balance c/d £14,000
Cr Totals £40,000

 

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

The balance on a firm’s debtors control account is £6,000.

The balance on its bad debts account is £300 and the balance on its provision for bad debts account is £285.

If a bad debt of £300, previously written off is subsequently recovered, the correct balance on the debtors control account in the nominal (general) ledger after recording the recovery is?

Select ONE answer:

1. £5,415
2. £5,700
3. £6,000
4. None of the above

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 original £6,000 balance is net of the £300 bad debt. The provision for bad debts is not relevant to the control account. When the bad debt is recovered, the £300 originally written off is reinstated by debiting the control account and crediting the bad debts account. The entry to record the money received is to debit the bank account and credit the debtors control account.
4. Not correct

 

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

Before considering bad debts. the balance on a firm‘s debtors control account is £1,000 (debit) and the balance on its provision for bad debts account is £25 (credit).

Subsequently, a bad debt of £50 is written off.

The balance on the debtors control account in the nominal (general) ledger after writing off the above bad debt is?

Select ONE answer:

1. £8,600
2. £9,600
3. £12,000
4. £13,600

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

Answer 4:

Creditors
Dr Discount Received £1,000
Dr Returns Outwards £6,000
Dr Bank £39,000
Dr Debtors £1,000
Dr Balance c/d £13,600
Dr Total £60,600
Cr Balance b/d £4,600
Cr Purchases £54,000
Cr Bank £2,000
Cr Total £60,600

 

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

Given the following information, what is the balance on the creditors control account as at 31 December?

• Credit balance on the creditors control account at 1 January – £4,600
• Transactions for the period 1 January to 31 December £1,000
• Discount received Credit purchases £54,000
• Credit purchases returns £6,000
• Refunds received from suppliers £2,000
• Payments to suppliers £39,000
• Balance in creditors ledger set off against debtors ledger £1,000

Select ONE answer:

1. £8,600
2. £9,600
3. £12,000
4. £13,600

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

Answer 4:

Creditors
Dr Discount Received £1,000
Dr Returns Outwards £6,000
Dr Bank £39,000
Dr Debtors £1,000
Dr Balance c/d £13,600
Dr Total £60,600
Cr Balance b/d £4,600
Cr Purchases £54,000
Cr Bank £2,000
Cr Total £60,600

 

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