Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Why are these three items in the debit side of receivables control account?
- This topic has 2 replies, 2 voices, and was last updated 11 years ago by pannanikt.
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- October 17, 2013 at 12:36 pm #142982
1. returned cheques
2. interest on overdue accounts
3. refund given to customers.October 17, 2013 at 1:27 pm #1429891. The basic entry everything starts with is credit sale – sale which will be paid later: invoice would be posted Cr sale(net), Cr VAT(if applicable) Dr Debtors(or receiveables control a/c).
Then when the cheque from client is received and you record it : Cr Debtors Dr Bank
But cheque has been bounced/returned it means you need deduct bank and post back this debtor previously cleared- in other words reverse previous entry Dr Debtors Cr Bank2. interest on overdue accounts – you have had a debtor and because it has not been paid you have charged interest. In other words the client needs to pay not only the invoice as in point 1 but also your interest. The entry would be Interest income Cr, Debtor Dr
3. refund given to customers – it should not be on debit side of Debtor/Receivables a/c. I would say discount given goes to Sale Dr ( or discounts given) and Debtors Cr. Actually it means it is not debtor anymore but creditor – now you are due money to customer, it is liability, Could be shown as decrease in debtors or increase in creditors.
It could be on debit side if it is discount received from supplier – check your question again.October 17, 2013 at 1:59 pm #142996Ok I think I know. It is receivables control account so it means refund given to customers would be:
Dr sale
Cr Receiv Control A/cbut then you need to allocate it to the right customer in sales ledger so would be:
Dr Receiv Control A/c
Cr Firm XYZ - AuthorPosts
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