CIMA BA3 · Chapter 5 · Question 8 of 10
How might a credit balance arise on an individual customer's account in the receivables ledger?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The customer has paid more than the amount owed, or returned goods after paying for them
Explanation
A customer account normally has a debit balance. A credit balance means the business owes the customer money, typically because of an overpayment or a credit note issued after payment. A credit sale increases the debit balance, and a write-off reduces it to nil.
More Receivables and payables control accounts MCQs
- Q10The receivables ledger control account agrees with the total of the list of customer balances. Which of the following is true?
- Q1What is the main purpose of a receivables ledger control account?
- Q2Which of the following items would NOT appear in the receivables ledger control account?
- Q3The following information relates to a business's receivables for the year: opening balance $28,400; credit sales $196,500; cash sales…
- Q4A payables ledger control account had an opening credit balance of $19,700. During the year credit purchases were $143,200, payments to…