ACCA FA · Chapter 10 · Question 6 of 12
The following information relates to a receivables control account for a year: Opening balance $42,800 Credit sales $310,500 Cash sales $24,000 Cash received from credit customers $296,300 Discounts allowed $1,900 Irrecoverable debts written off $2,400 Sales returns $4,100 Contra with payables ledger $1,600 Customer cheque dishonoured $700 Increase in allowance for receivables $800 What is the closing balance on the receivables control account?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $47,700
Explanation
Debits: $42,800 + $310,500 + $700 (dishonoured cheque reinstates the debt) = $354,000. Credits: $296,300 + $1,900 + $2,400 + $4,100 + $1,600 = $306,300. Closing balance = $354,000 - $306,300 = $47,700. Cash sales never pass through receivables, and the allowance for receivables is a separate account, so neither is included. Deducting the allowance gives $46,900.
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