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WAEC Financial Accounting 2015 Question 24

Question 24

Control Accounts

The process of using sales ledger balance to cancel off purchases ledger balance is

  1. A.balancing.
  2. B.set off.
  3. C.reconciliation.
  4. D.cancelling.
Show the answer and explanation

Answer: B (set off.)

Explanation

Offsetting what a customer owes us against what we owe him (as a supplier) is called a set-off or contra.