Theory question 102
Control AccountsSection B
On January 1, 1991 the Sales Ledger balance of Ola was ₦2,400 debit while the bought Ledger balance was ₦970 credit. The following transactions took place in the month of January 1991
Credit Sales ₦35,180
Bad debt ₦845
Dishonoured cheque ₦1,250
Credit Purchases ₦18,060
Returns Inwards ₦1,570
Bills receivable ₦4,500
Cash received from debtors ₦15,600
Cash paid to creditors ₦11,400
Discount allowed ₦450
Discount received ₦945
Cheques from debtors ₦7,500
Bills Payable ₦2,150
Debit Balance in Bought Ledger transferred to Sales Ledger ₦260
Discount allowed but subsequently disallowed ₦150
Discount received but subsequently withdrawn ₦145
Prepare: (a) Total Debtors Account (b) Total Creditors Account
Show the model answer
(a) Total Debtors Account: Dr balance b/d 2,400; credit sales 35,180; dishonoured cheque 1,250; discount disallowed 150; total 38,980 / Cr bad debts 845; returns inwards 1,570; bills receivable 4,500; cash 15,600; discount allowed 450; cheques 7,500; transfer to bought ledger (contra) 260; balance c/d 8,255; total 38,980
(b) Total Creditors Account: Dr cash 11,400; discount received 945; bills payable 2,150; transfer (contra) 260; balance c/d 4,420; total 19,175 / Cr balance b/d 970; credit purchases 18,060; discount withdrawn 145; total 19,175
A discount disallowed puts the debt back: debit debtors (and credit creditors for a discount withdrawn).