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There is a question about which of the following items appear on the credit side of the sales ledger control account
1 Cash received from customers
2 Irrecoverable debts written off
3 Increase in the allowance for receivables
4 Discounts allowed
5 Sales
6 Credits for goods returned by customers
7 Cash refunds to customersCan you please tell me how come Sales is not on the credit side? and also briefly which of these items appear on credit side and why?
The sales ledger control account is another name for the total receivables account.
When we make sales on credit, we debit receivables (sales ledger control account) and credit sales.
The others that appear on the credit side are cash received (Dr Cash Cr Receivables); irrecoverable debts (Dr Irrecoverable debts expense; Cr Receivables); discounts allowed (Dr discounts expense; Cr Receivables); returns (Dr Returns (or sales); Cr Receivables);
I really do suggest that you work through our free lectures (which cover the whole of the Paper F3 syllabus) – especially the lecture on control accounts.
Thanks a lot. I was just confused because i thought the question referred to Sales account instead of sales ledger which is the other name for Recievables. Now it all makes sense. Thanks and i did go through all the lectures and notes and really appreciate all the effort by you and your team.
I assume you mean the sales ledger control account!
The balance on it is the total receivables that will appear on the SOFP. Also, it checks the sales ledger – the balance on the sales ledger control account should be equal to the total of the balances in the sales ledger.
All of this is explained in my free lectures on Books of Prime Entry. The lectures are a complete free course for Paper F3 and cover everything needed to be able to pass the exam well.
Hi, how can I find the way to free lectures (which cover the whole of the Paper F3 syllabus) – especially the lecture on control accounts., since I’m a new member here
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