Category: Accounting

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

 

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At 31 May, according to John Smith’s creditors’ ledger, he owed Alpha Ltd, one of his suppliers, £1,518.

The balance shown on the statement he received from Alpha Ltd did not agree with this. A purchase by John Smith from Alpha Ltd of goods costing £520 was recorded on Alpha’s statement but not in John Smith’s ledger.

A cheque for £250 paid to Alpha Ltd was correctly recorded in John Smith’s ledger but was not shown on the statement from Alpha Ltd.

The balance on the statement from Alpha Ltd was?

Select ONE answer:

1. £748
2. £1,248
3. £1,788
4. £2,288

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
   Balance per John Smith’s ledger £1,518
   Invoice not yet recorded in the ledger £520
   The amount owed by John Smith to Alpha Ltd £2,038
   Cheque paid to Alpha Ltd. not yet recorded by Alpha Ltd -£250
   The balance shown on the statement from Alpha Ltd £1,788
4. Not correct

 

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At 31 December the balance on a firm’s bank statement was £1,000 overdrawn. At the same date, outstanding cheques amounted to £3,000, outstanding lodgements amounted to £5,000 and there was a dishonoured cheque from a customer of £500 entered on the firm’s bank statement but not yet entered in the bank account in the firm’s ledger.

The balance brought down on the bank account in the firm’s ledger was?

Select ONE answer:

1. £500 debit
2. £500 credit
3. £1,000 credit
4. £1,500 debit

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 1

1. Correct
   Computation of Correct Ledger Balance as at 31 December
   Balance per bank statement -£1,000
   Outstanding lodgements £5,000
   Cheques not presented -£3,000
   Balance per ledger (corrected) £1,000

   However, as the dishonoured cheque has not yet been entered in the ledger, the actual ledger balance exceeds the correct ledger balance by £500. Therefore, the actual ledger balance is £500 debit.

2. Not Correct
3. Not correct
4. Not correct

 

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