Control account

This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author

Posts
December 9, 2022 at 10:17 am #674074
bettyc
Member
- Topics: 1
- Replies: 0
Hi everyone!

I am studying FA module of ACCA .I was doing some exam exercises and I have a doubt in this question because I do not fully understand why discounts allowed is included on the credit side of the receivables control account. Thank you so much. I appreciate your help.

On 1 April 20X8 Brendon was owed $61,784 by his credit customers. During the year to 31 March 20X9 his credit sales totalled $660,846, discounts allowed totalled $11,945, irrecoverable debts were $6,150 and dishonoured cheques amounted to $250. The amount received from credit customers during the year was $655,135. On 31 March 20X9, Brendon was owed $52,278 from his credit customers.

What was the amount of interest was charged to credit customers for late payment during the year ended 31 March 20X9?

The answer is:2628
December 9, 2022 at 5:53 pm #674104
John Moffat
Keymaster
- Topics: 57
- Replies: 54851
If they give a discount to customers, then it means that the customer owes them less money.

The amount owed by customers is a debit balance on receivables, so when they owe us less we credit receivables.

Have you watched my free lectures on control accounts?
Author

Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.