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WAEC Financial Accounting 2019 Question 39

Question 39

Control Accounts

Set-off is carried out in the control account when

  1. A.a business organization is both a customer and a supplier.
  2. B.customers refuse to pay their debts.
  3. C.the debtors settle their accounts.
  4. D.customers' cheques are dishonoured.
Show the answer and explanation

Answer: A (a business organization is both a customer and a supplier.)

Explanation

When the same firm is both debtor and creditor, the balances can be offset.