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Control account

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Control account

  • This topic has 1 reply, 2 voices, and was last updated 1 month ago by John Moffat.
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  • 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: 51551
    • ☆☆☆☆☆

    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?

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