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WAEC Financial Accounting 2024 Question 18

Question 18

Control Accounts

Use the following information to answer questions 17 and 18.
Bayo issued a credit note to Ayo who returned defective goods. Each parties maintain sales ledger control account and purchases ledger control account.
Bayo will record this transaction on the

  1. A.debit side of the sales ledger control account.
  2. B.credit side of the sales ledger control account.
  3. C.debit side of the purchases ledger control account.
  4. D.credit side of the purchases ledger control account.
Show the answer and explanation

Answer: B (credit side of the sales ledger control account.)

Explanation

Bayo is the seller; the credit note (returns inwards) reduces what Ayo owes him, so he credits the sales ledger control account.