Theory question 105
Control AccountsThe following balances have been extracted from the books of Jola -Ade, a Sole trader, for the year ended 31st December, 1991.
Sales Ledger Balance, 1/1/91 ₦4,936
Purchases Ledger Balance 1/1/91 ₦3,676
Sales ₦49,916
Returns inwards ₦1,139
Cheque and Cash received from customers ₦46,490
Discount allowed ₦1,455
Bad debts written off ₦99
Purchases ₦42,257
Returns Outwards ₦1,098
Cheques paid to suppliers ₦38,765
Discount received ₦887
Cash paid twice in error to a supplier now refunded ₦188
Interest charged to a customer in respect of an overdue Acct. ₦50
You are required to prepare the Sales Ledger and Purchases Ledger Control Accounts for the year ended 31st December, 1991.
Show the model answer
Sales Ledger Control Account: Dr balance b/d 4,936; sales 49,916; interest charged 50; total 54,902 / Cr returns inwards 1,139; cash and cheques 46,490; discount allowed 1,455; bad debts 99; balance c/d 5,719; total 54,902
Purchases Ledger Control Account: Dr returns outwards 1,098; cheques paid 38,765; discount received 887; balance c/d 5,371; total 46,121 / Cr balance b/d 3,676; purchases 42,257; refund of double payment 188; total 46,121
A refund from a supplier reverses an earlier payment, so it is credited in the purchases ledger control account.