chapter 16: debtors and creditors list; control accounts

Question 1

what is the purpose of the debtors and creditors list?

Answer 1

debtors list
- provides the amount owed by each of the debtors
- provides total amoun owed by all debtors
creditors list
- provides amount owed to each of the creditors
- provides total amount owed to all creditors

Question 2

explain the advantages of control accounts

Answer 2

• provides totals of debtors and creditors
• errors concerning debtors or creditors can easily be located
• provides summaries of transactions relating to debtors and creditors
• could help in detecting and tracing fraud

Question 3

differentiate between debtors and creditors control account

Answer 3

debtors control account- a debtors control account summarises all transactions with debtors
creditors control account- a creditors control account summarises all transaction with creditors

Question 4

differentiate between the debtors and creditors list

Answer 4

debtors list- a list of names and balances of individual debtors’ accounts
creditors list- a list of names and balances of individual creditors; accounts

Question 5

what is the purpose of the control accounts?

Answer 5

control accounts provide sammaries of entries of debtors and creditors in the business