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JAMB Principles of Accounts 2000 Question 26

Question 26

Control Accounts

When a customer's cheque is returned unpaid in a debtor's control accounting system, the treatment will be

  1. A.debit bank, credit customer and credit control account
  2. B.credit bank, debit customer, and debit control account
  3. C.debit customer, credit control account and credit bank
  4. D.credit control account, debit bank and debit customer.
Show the answer and explanation

Answer: B (credit bank, debit customer, and debit control account)

Explanation

The customer owes the money again: credit bank, debit the customer's account and debit the sales ledger control account.