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John Moffat.
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Manjot.10k
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A business had a receivables’ ledger control account did not agree with the total of the
balances on the receivables’ ledger. An investigation revealed that the sales day book had
been overcast by $10.
What effect will this have on the receivables’ ledger control account?
A The control account should be credited with $10
B The control account should be debited with $10
C The control account should be credited with $20
D The control account should be debited with $20
John Moffat
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The total from the day book will have been entered on the debit side of the control account.
However the total had been overcast and so was more that it really should have been. Therefore the total entered in the control account needs to be reduced by $10 and we do this by crediting the control account.
Have you watched my free lectures on Books of Prime Entry? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
Manjot.10k
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