ZIMSEC O Level Principles of Accounts Notes: Sales Control Account Example
- We have looked at the nature of the Sales Ledger Control Account in detail
- Now it is time to look at a detailed example:
Question
Prepare a sales ledger control account from the following information for October 20X6, carrying down the balance at 31 October:
- Oct 1 Sales ledger balances $28,409
- Oct 31 Sales journal $26,617
- Bad debts written off $342
- Cheques received from debtors $24,293
- Discounts allowed $416
- Cheques dishonoured $120
- Returns inwards $924
- Set-offs against balances in purchases ledger $319
| Sales Ledger Control Account | ||||||
| Date | Details | Amount($) | Date | Details | Amount($) | |
| 1 October | Balance b/d | 28409 | 31 October | Bad Debts | 342 | |
| 31 October | Sales | 26617 | 31 October | Bank | 24293 | |
| 31 October | Dishonored Cheques | 120 | 31 October | Discount Allowed | 416 | |
| 31 October | Sales Returns | 924 | ||||
| 31 October | Set Off | 319 | ||||
| 31 October | Balance c/d | 28852 | ||||
55146 | 55146 |
- There are a number of items that merit discussion
- Dishonoured cheques are cheques that are received from customers but for some reason the customer’s bank refuses to honour them i.e. no payment is received
- When a cheque is received the payment is immediately recorded in the customer’s account and the cash book
- This entry has to be reversed to show that payment is still owing due to the turn in events
- This is done by debiting the customer’s account and in this case the Sales Control Account with the amount of the dishonored cheque
- If there is interest on outstanding debts it is added to the debit side
To access more topics go to the Principles of Accounting Notes.
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