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JAMB Principles of Accounts 2003 Question 22

Question 22

Control Accounts

In a control account, provision for bad debts is found on the

  1. A.debit side of the purchases ledger control account
  2. B.debit side of the sales ledger control account
  3. C.credit side of the purchases ledger control account
  4. D.credit side of the sales ledger control account
Show the answer and explanation

Answer: D (credit side of the sales ledger control account)

Explanation

Items that reduce debtors, such as bad debts and allowances for them, go on the credit side of the sales ledger control account.