7. CONTROL ACCOUNTS Flashcards
What is a control account?
An account in the SFP which, when all transactions are settled, would have a nil balance (e.g. receivables and payables)
What is a memorandum ledger?
Ledgers containing all transactions by line from the sales, purchases and cash day books showing how much is owed from each individual customer/to each supplier
Do cash transactions appear in memorandum accounts?
No
What is a contra?
An entry in the ledger which cancels out, or ‘contras’ an opposite entry in another or the same ledger - made when we owe money to a supplier and they also owe money to us
What is the double entry for a contra of £200?
Dr Payables £200
Cr Receivables £200
What is the double entry made to clear bad debt from the receivables control account?
Dr Bad and Doubtful Debt expense
Cr Receivables control
Would each of the following errors require the use of a suspense account to balance the trial balance?
a. The total of the sales book $25,600 has been posted to the sales account as $26,500
b. The purchase of a motor van costing $15,000 has been debited to the purchases account instead of to the non-current asset account
c. The purchase of stationary on credit has been entered into both the stationary account and to the payables account as $54 instead of $45
d. A charity donation of $50 from petty cash has not been entered into the petty cash book
question 68
my answer
a.
b.
