Question Tag: Contra Entries

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FA – Nov 2024 – L1 – Q2a – Preparation of Partnership Accounts

Prepare receivables and payables control accounts and identify books of prime entry for specific transactions.

Question

At the close of business on 31 July 2023, the following balances were extracted from the books of Akrowa, a limited liability company:

GH¢
Receivables Ledger Control Account
Payables Ledger Control Account

During August 2023, the following transactions occurred:

Transaction	GH¢
1) Cash received from customers	63,600
2) Cash paid to suppliers	65,000
3) Sales on credit	96,400
4) Purchases on credit	73,000
5) Sales returns	3,800
6) Purchase returns	1,400
7) Discounts received from suppliers	800
8) Settlement discount claimed by customer unexpectedly	600
9) Irrecoverable debts written off	5,400
10) Customer and supplier accounts settled by contra	4,200

Required:

i) Prepare the Receivables Ledger Control Account and Payables Ledger Control Account for August 2023 and determine the balances at 31 August 2023.

ii) Identify the book of prime entry from which each of the transactions (1) to (10) originated.

Answer

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Tags: Contra Entries, Control Accounts, Irrecoverable Debts, Payables Ledger, Prime Entry Books, Purchase Returns, Receivables Ledger, Sales Returns
Level: Level 1

Topic: Control accounts and account reconciliations
Series: Nov 2024

FA – Nov 2011 – L1 – SA – Q7 – Control Accounts

This question asks how contra entries in control accounts are corrected.

Question

By what means do you effect correction of contra entries in control accounts?

Answer

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Tags: Contra Entries, Control Accounts
Level: Level 1

Topic: Control Accounts
Series: NOV 2011

FA – April 2022 – L1 – Q3 – Control accounts and account reconciliations | Correction of errors

Preparation of a revised Sales Ledger Control Account and a revised schedule of receivables, including the correction of errors.

Question

Gyidi Ltd sells goods on credit to most of its customers. In order to control its system of debt collection, the company maintains a sales ledger control account. The following information is available for the year ended 31 December 2020.

Account	Amount (GHȼ)
Sales Ledger Control Account balance b/d 1 January 2020	88,200 (Debit)
Sales	310,400
Sales returns	20,600
Discounts allowed	15,000
Irrecoverable debts	3,500
Cheques received from customers	292,040
Dishonored cheques	650
Contra purchases ledger	1,050

The schedule of receivables as at 31 December 2020 has also been provided as follows:

Customer	Amount (GHȼ)
Kwaku Ansah	14,200
Adam Musah	15,000
Akua Afari	22,800
Naa Shikaa	1,400
Kofi Amosah	8,600
Total	62,000

The sales Ledger Control Account balance did not agree with the total from the schedule of receivables. Subsequent investigations revealed the following errors: i) Cash received of GHȼ600 had been credited to Kwaku Ansah’s account as GHȼ60. ii) The discount allowed column in the cash book had been overstated by GHȼ960. iii) A sales return of GHȼ3,200 from Adam Musah was correctly recorded in Adam Musah’s account but had been omitted from the total in the Sales Returns Journal. iv) A credit sale of GHȼ4,000 to Kofi Amosah was correctly recorded in the Sales Journal but no entry had been made in Kofi Amosah’s account. v) A cheque received from Naa Shikaa for GHȼ2,430 correctly processed through the books had subsequently been dishonored. No entries have yet been made to record this dishonored cheque. vi) A credit sale of GHȼ5,200 had been made to Kwaku Ansah but no entries have yet been made to record this transaction. vii) Cash received of GHȼ300 had been debited to Kofi Amosah’s account. viii) No contra entry had been made in Akua Afari’s account in the Sales Ledger in respect of purchases by Gyidi Ltd from Akua Afari for goods with a list price of GHȼ750 less an 8% trade discount. This item has been correctly recorded in the Sales Ledger Control Account.

Required:
a) Prepare a revised Sales Ledger Control Account for the year ended 31 December 2020.
(9 marks)

b) Prepare a revised schedule of receivables as at 31 December 2020.
(7 marks)

c) Explain TWO (2) ways in which control accounts can be useful to businesses.
(4 marks)

Answer

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Tags: Contra Entries, Dishonored Cheques, Error Correction, Receivables, Sales Ledger Control Account
Level: Level 1

Topic: Control accounts and account reconciliations, Correction of errors
Series: APR 2022

FA – Nov 2021 – L1 – Q3 – Control accounts and account reconciliations

Preparation of Receivables and Payables Control Accounts, including adjustments for dishonored cheques, discounts, and contra entries.

Question

The following information relates to the receivables and payables of Daakye, a sole trader, for the year ended 31 December 2020.

Extract from the books as at 1 January 2020 is stated below:

Account	Amount (GHȼ)
Receivables’ ledger debit balances	400,000 Dr
Receivables’ ledger credit balances	40,000 Cr
Payables’ ledger credit balances	360,000 Cr
Payables’ ledger debit balances	160,000 Dr

Transactions for the year ended 31 December 2020:

Transaction	Amount (GHȼ)
Sales on credit	2,800,000
Sales returns (all credit)	160,000
Purchases on credit	1,800,000
Purchases returns (all on credit)	80,000
Amounts received from customers	2,400,000
Discount allowed to customers	40,000
Discount received from suppliers	60,000
Bad debt written off	120,000
Interest charged by a supplier for late payment of accounts	12,000
Discount received but subsequently disallowed	6,000
Payments to suppliers	1,500,000
Dishonored cheque received from a customer (included in the amounts received from customers above)	25,000
Contra entry between receivable and payable balances	9,780

Additional Information:

A customer’s balance of GHȼ6,990 was omitted from the debit balances list as of 1 January 2020.
As at 31 December 2020, the total of the credit balances in the receivable ledger was GHȼ60,000.
The total of the debit balances in the payable ledger as at 31 December 2020 was GHȼ24,000.

Required:
a) Prepare the Receivable and Payable Control Accounts for Daakye for the year ended 31 December 2020.
(18 marks)

b) Explain TWO (2) reasons for preparing control accounts.
(2 marks)

Answer

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Tags: Contra Entries, Discounts, Dishonored Cheques, Payables Control Account, Receivables Control Account
Level: Level 1

Topic: Control accounts and account reconciliations
Series: NOV 2021

FA – Nov 2024 – L1 – Q2a – Preparation of Partnership Accounts

Prepare receivables and payables control accounts and identify books of prime entry for specific transactions.

Question

At the close of business on 31 July 2023, the following balances were extracted from the books of Akrowa, a limited liability company:

GH¢
Receivables Ledger Control Account
Payables Ledger Control Account

During August 2023, the following transactions occurred:

Transaction	GH¢
1) Cash received from customers	63,600
2) Cash paid to suppliers	65,000
3) Sales on credit	96,400
4) Purchases on credit	73,000
5) Sales returns	3,800
6) Purchase returns	1,400
7) Discounts received from suppliers	800
8) Settlement discount claimed by customer unexpectedly	600
9) Irrecoverable debts written off	5,400
10) Customer and supplier accounts settled by contra	4,200

Required:

i) Prepare the Receivables Ledger Control Account and Payables Ledger Control Account for August 2023 and determine the balances at 31 August 2023.

ii) Identify the book of prime entry from which each of the transactions (1) to (10) originated.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contra Entries, Control Accounts, Irrecoverable Debts, Payables Ledger, Prime Entry Books, Purchase Returns, Receivables Ledger, Sales Returns
Level: Level 1

Topic: Control accounts and account reconciliations
Series: Nov 2024

FA – Nov 2011 – L1 – SA – Q7 – Control Accounts

This question asks how contra entries in control accounts are corrected.

Question

By what means do you effect correction of contra entries in control accounts?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contra Entries, Control Accounts
Level: Level 1

Topic: Control Accounts
Series: NOV 2011

FA – April 2022 – L1 – Q3 – Control accounts and account reconciliations | Correction of errors

Preparation of a revised Sales Ledger Control Account and a revised schedule of receivables, including the correction of errors.

Question

Account	Amount (GHȼ)
Sales Ledger Control Account balance b/d 1 January 2020	88,200 (Debit)
Sales	310,400
Sales returns	20,600
Discounts allowed	15,000
Irrecoverable debts	3,500
Cheques received from customers	292,040
Dishonored cheques	650
Contra purchases ledger	1,050

The schedule of receivables as at 31 December 2020 has also been provided as follows:

Customer	Amount (GHȼ)
Kwaku Ansah	14,200
Adam Musah	15,000
Akua Afari	22,800
Naa Shikaa	1,400
Kofi Amosah	8,600
Total	62,000

Required:
a) Prepare a revised Sales Ledger Control Account for the year ended 31 December 2020.
(9 marks)

b) Prepare a revised schedule of receivables as at 31 December 2020.
(7 marks)

c) Explain TWO (2) ways in which control accounts can be useful to businesses.
(4 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contra Entries, Dishonored Cheques, Error Correction, Receivables, Sales Ledger Control Account
Level: Level 1

Topic: Control accounts and account reconciliations, Correction of errors
Series: APR 2022

FA – Nov 2021 – L1 – Q3 – Control accounts and account reconciliations

Preparation of Receivables and Payables Control Accounts, including adjustments for dishonored cheques, discounts, and contra entries.

Question

The following information relates to the receivables and payables of Daakye, a sole trader, for the year ended 31 December 2020.

Extract from the books as at 1 January 2020 is stated below:

Account	Amount (GHȼ)
Receivables’ ledger debit balances	400,000 Dr
Receivables’ ledger credit balances	40,000 Cr
Payables’ ledger credit balances	360,000 Cr
Payables’ ledger debit balances	160,000 Dr

Transactions for the year ended 31 December 2020:

Transaction	Amount (GHȼ)
Sales on credit	2,800,000
Sales returns (all credit)	160,000
Purchases on credit	1,800,000
Purchases returns (all on credit)	80,000
Amounts received from customers	2,400,000
Discount allowed to customers	40,000
Discount received from suppliers	60,000
Bad debt written off	120,000
Interest charged by a supplier for late payment of accounts	12,000
Discount received but subsequently disallowed	6,000
Payments to suppliers	1,500,000
Dishonored cheque received from a customer (included in the amounts received from customers above)	25,000
Contra entry between receivable and payable balances	9,780

Additional Information:

A customer’s balance of GHȼ6,990 was omitted from the debit balances list as of 1 January 2020.
As at 31 December 2020, the total of the credit balances in the receivable ledger was GHȼ60,000.
The total of the debit balances in the payable ledger as at 31 December 2020 was GHȼ24,000.

Required:
a) Prepare the Receivable and Payable Control Accounts for Daakye for the year ended 31 December 2020.
(18 marks)

b) Explain TWO (2) reasons for preparing control accounts.
(2 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Contra Entries, Discounts, Dishonored Cheques, Payables Control Account, Receivables Control Account
Level: Level 1

Topic: Control accounts and account reconciliations
Series: NOV 2021

Question Tag: Contra Entries

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FA – Nov 2024 – L1 – Q2a – Preparation of Partnership Accounts

Prepare receivables and payables control accounts and identify books of prime entry for specific transactions.

During August 2023, the following transactions occurred:

Required:

FA – Nov 2011 – L1 – SA – Q7 – Control Accounts

This question asks how contra entries in control accounts are corrected.

FA – April 2022 – L1 – Q3 – Control accounts and account reconciliations | Correction of errors

Preparation of a revised Sales Ledger Control Account and a revised schedule of receivables, including the correction of errors.

FA – Nov 2021 – L1 – Q3 – Control accounts and account reconciliations

Preparation of Receivables and Payables Control Accounts, including adjustments for dishonored cheques, discounts, and contra entries.

FA – Nov 2024 – L1 – Q2a – Preparation of Partnership Accounts

Prepare receivables and payables control accounts and identify books of prime entry for specific transactions.

During August 2023, the following transactions occurred:

Required:

FA – Nov 2011 – L1 – SA – Q7 – Control Accounts

This question asks how contra entries in control accounts are corrected.

FA – April 2022 – L1 – Q3 – Control accounts and account reconciliations | Correction of errors

Preparation of a revised Sales Ledger Control Account and a revised schedule of receivables, including the correction of errors.

FA – Nov 2021 – L1 – Q3 – Control accounts and account reconciliations

Preparation of Receivables and Payables Control Accounts, including adjustments for dishonored cheques, discounts, and contra entries.

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