1)You are given the following information:
Receivables at 1 January 20X3 $10,000
Receivables at 31 December 20X3 $9,000
Total receipts during 20X3 (including cash sales of $5,000) $85,000
What is the figure for sales on credit during 20X3?
Answer is C $79,000, my question is. What does total receipts mean in receivables account when it comes to debits and credits?
2)The following control account has been prepared by a trainee accountant:
RECEIVABLES LEDGER CONTROL ACCOUNT
Opening balance $308,600 Cash received from credit customers $147,200
Credit sales $154,200 Discounts allowed to credit customers $1,400
Cash sales $88,100
Contras against credit balance in Payables ledger $4,600
Payables ledger 4,600 interest charged on overdue accounts $2,400
Irrecoverable debts written off 4,900
Allowance for receivables $2,800
Closing balance $396,800
What should the closing balance be when all the errors made in preparing the receivables ledger control account have been corrected?
Answer is $307,100. Why wasn’t the $2800 allowance not included in the calculation?
Yet in OPENTUTION chapter 16 example 1, you included irrecoverable debt written off of $460.
1. Total receipts is the cash received!
Cash received for cash sales: Debit cash; Cr Sales
Cash received from credit sales: Debit cash; Cr Receivables
2. Irrecoverable debts and the allowance for receivables are two different things! The allowance for receivables never appears in the Receivables ledger control account, and it does not appear in the account in chapter 15 example 1.
I do not believe you are watching the lectures, and if you are not then there is no point in using the lecture notes – they are simply lecture notes and it is in the lectures that I explain and expand on the notes. If you are not watching the lectures then you must buy a Study Text from one of the ACCA approved publishers and study from there if you are to pass the exam.
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