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JAMB Principles of Accounts 2004 Question 19

Question 19

Control Accounts

In a sales ledger, contra entry is found on the

  1. A.debit side of the debtors' control account
  2. B.debit side of the creditors' control account
  3. C.credit side of the debtors' control account
  4. D.credit side of the creditors' control account
Show the answer and explanation

Answer: C (credit side of the debtors' control account)

Explanation

A contra sets off a debtor's balance against what we owe him: debit creditors' control, credit debtors' (sales ledger) control.