JAMB Principles of Accounts 2007 Question 26

Question 26

Control Accounts

Sales Ledger Control Account (Extract)
Bal. b/d ₦18 400 | Bad debt written off ₦1 500
Sales ₦? | Discount allowed ₦500
| Cheque received from debtors ₦25 000
| Cash received from debtors ₦10 000
| Bal. c/d ₦?
If the discount allowed is 2.5% of sales, calculate the closing balance in the sales ledger account.

A.₦1 400
B.₦6 600
C.₦16 600
D.₦18 600.

Show the answer and explanation

Answer: A (₦1 400)

Explanation

Sales = 500 ÷ 2.5% = ₦20 000. Debits = 18 400 + 20 000 = ₦38 400. Credits = 1 500 + 500 + 25 000 + 10 000 = ₦37 000. Closing balance = ₦1 400.