Control Accounts

Question 1

Whats the difference between a Receivables ledger control account and a receivables ledger

Answer 1

RLCA is the total owed by all credit customers at one paitcular time
Receivables ledger is a list of amounts owed by each individual credit customer.

Question 2

What goes on the debit side and credit side of a receivable ledger control account

Answer 2

Debit - Sales
Credit - Bank, Sales returns, Discounts allowed

Question 3

What goes on the debit side and credit side of a payable ledger control account

Answer 3

Debit Purchase returns, discounts received
Credit - Purchases

Question 4

If the c/d on the vat account is on the credit side what does this mean?

Answer 4

The business owes HMRC money, if on debit side HMRC owe money to the business.

Question 5

What error has occurred If the receivables ledger is higher than the RCLA

Answer 5

Duplication of sales invoice
Cash receipt has been omitted from the receivables but not the RCLA
Sales return has been omitted from the receivables but not the RCLA

Question 6

What error has occurred if the RCLA is higher than the receivables?

Answer 6

Sales recorded on credit side of receivables ledger
Total sales column has been overstated
Discounts allowed posted twice
Total column of bank receipts from customers has been understated.

Question 7

Whats the debits and credits for irrecoverable debt?

Answer 7

Irrecoverable debt - debit
VAT - Debit
Receivables - Credit