Question Tag: Control Accounts

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FA – May 2012 – L1 – SA – Q17 – Control Accounts

Identifying an advantage not associated with control accounts.

Question

The advantages of Control Accounts do NOT include:

A. Locating errors
B. Facilitating the extraction of trial balance
C. Detecting fraud
D. Checking on the accuracy of ledger entries
E. Discouraging adherence to double entry principle

Answer

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Tags: Control Accounts, Error Detection, Trial Balance
Level: Level 1

Topic: Control Accounts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q15 – Control Accounts

Identifying items not credited to the Accounts Payable Control Account.

Question

Which of the following items should NOT be on the credit side of Accounts Payable Control Account?

A. Total of purchases day book
B. Interest charged by suppliers
C. Transfer of debit balance to accounts receivable ledger
D. Transfer of credit balance from accounts receivable ledger
E. Set-offs

Answer

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Tags: Control Accounts, Ledger Entries, Payables
Level: Level 1

Topic: Control Accounts
Series: MAY 2012

FA – May 2012 – L1 – SA – Q2 – Double-Entry Accounting Principles

Identifying the shortcoming of single entry book-keeping.

Question

Which of the following is NOT a shortcoming of single entry book-keeping?

A. A trial balance is not available
B. Profits are overstated
C. There are no subsidiary books
D. There are no control accounts
E. There are no ledger accounts.

Answer

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Tags: Book-keeping, Control Accounts, Trial Balance
Level: Level 1

Topic: Double-Entry Accounting Principles
Series: MAY 2012

FA – Nov 2011 – L1 – SA – Q20 – Control Accounts

This question asks for another name for the Debtors Control Ledger Account.

Question

Another name for Debtors Control Ledger Account is?

Answer

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Tags: Control Accounts, Sales Ledger
Level: Level 1

Topic: Control Accounts
Series: NOV 2011

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 – Nov 2011 – L1 – SA – Q3 – Control Accounts

This question tests knowledge on the description and function of control accounts in accounting.

Question

Which of the following describes a Control Account?
A. Conglomerate of ledger system
B. Combined ledger system
C. Self-balancing ledger system
D. Standardized ledger system
E. List of balances

Answer

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Tags: Control Accounts, Ledger System
Level: Level 1

Topic: Control Accounts
Series: NOV 2011

FA – Nov 2020 – L1 – SA – Q17 – Control Accounts

Identifies items recorded on the credit side of a receivables ledger control account.

Question

Which of the following would be on the credit side of the receivables ledger control account?

I. Cash received
II. Irrecoverable debts
III. Discount allowed
IV. Sales

A. I, II, and III
B. I, III, and IV
C. II and IV
D. I and IV
E. I, II, III, and IV

Answer

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Tags: Control Accounts, Credit Side, Receivables Ledger
Level: Level 1

Topic: Control Accounts
Series: NOV 2020

FA – Nov 2020 – L1 – SA – Q6 – Control Accounts

Identifies a feature that does not describe a control account.

Question

Which of the following is NOT a feature of a control account?
A. It is maintained by the financial controller.
B. It is used to check arithmetical accuracy of the ledger to which it relates.
C. The ledger to which it relates is known as self-financing.
D. It helps in the detection of fraud and error.
E. The entries therein appear on the same side as they do in the individual accounts.

Answer

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Tags: Control Accounts, Fraud Detection, Ledger Accuracy
Level: Level 1

Topic: Control Accounts
Series: NOV 2020

FA – Nov 2012 – L1 – SA – Q7 – Control Accounts

Identifying a source that does not provide information for preparing control accounts.

Question

Source of information for preparing Control Accounts EXCLUDES:

A. Purchases journal
B. Cash discount
C. Sales day book
D. Cash account
E. Opening Statement of Financial Position

Answer

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Tags: Cash, Control Accounts, Prime Entry, Purchases
Level: Level 1

Topic: Control Accounts
Series: NOV 2012

FA – May 2014 – L1 – SA – Q7 – Control Accounts

Identifies a feature that is not characteristic of control accounts.

Question

Which of the following is NOT a feature of a control account?
A. It is maintained by the financial controller
B. It is used to check arithmetical accuracy of the ledger to which it relates
C. The ledger to which it relates is known as self-financing
D. It contains the total of entries in individual accounts
E. The entries therein appear on the same side as they do in the individual accounts

Answer

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Tags: Control Accounts, Financial Records, Ledger Accuracy
Level: Level 1

Topic: Control Accounts
Series: MAY 2014

FA – May 2015 – L1 – Q3a – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Prepare Receivables, Payables control accounts, Opening Capital, Statement of Profit or Loss, and Statement of Financial Position using given data from single entry

Question

Mr. Ken Stevenson keeps single entry books of account. He had the following balances on 1 January, 2013:

N
Inventory
Payables
Prepaid insurance
Bank overdraft
Furniture
Motor vehicles
Receivables
Borrowings

The following information is extracted from his cash book in respect of the year ended 31 December 2013:

DR N	CR N
Revenue	279,500
Receipt from trade receivables	536,400







815,900	815,900

He had the following balances on 31 December 2013:

N
Motor vehicles
Inventory
Furniture
Receivables
Payables
Borrowings

Additional information:
(i) Interest on Borrowings to be accrued for at 5% per annum.
(ii) Bad debts of N12,600 are to be written off while 5% allowance is to be made on the net receivables at 31 December, 2013.
(iii) Depreciation is to be charged on the non-current assets at the rate of 10% per annum.

You are required to prepare:

a. Receivables control account (2 Marks)
b. Payables control account (2 Marks)
c. The opening capital (2 Marks)
d. Statement of Profit or Loss for the year ended 31 December 2013 (8 Marks)
e. Statement of Financial Position as at 31 December 2013 (6 Marks)

Answer

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Tags: Bad Debts, Control Accounts, Depreciation, Financial Position, Receivables and Payables, Single entry system, Statement of Profit or Loss
Level: Level 1

FA – May 2024 – L1 – SB – Q3a – Control Accounts

Lists reasons for differences between a supplier's statement and the ledger account and explains how to identify and resolve these differences.

Question

a. List three possible reasons for differences between the supplier’s statement balance and the supplier’s account balance in the ledger and explain how these differences can be identified and resolved during the reconciliation process. (6 Marks)

Answer

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Tags: Control Accounts, Ledger Account, Reconciliation, Supplier Statement
Level: Level 1

Topic: Control Accounts
Series: MAY 2024

FA – Mar/July 2020 – L1 – SB – Q5 – Control Accounts

Preparation of receivables and payables ledger control accounts, uses of control accounts, and accounting errors not detectable by trial balance.

Question

The following balances were extracted from the books of Judexco Limited on December 31, 2018:

Required:
a. Prepare the receivables ledger control account. (7 Marks)
b. Prepare the purchases ledger control account. (6 Marks)
c. List FOUR uses of control accounts. (4 Marks)
d. Outline SIX accounting errors that cannot be discovered by means of a trial balance. (3 Marks)

Answer

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Tags: Accounting Errors, Control Accounts, Payables Ledger, Receivables Ledger
Level: Level 1

Topic: Control Accounts
Series: MAR/JULY 2020

FA – Nov 2020 – L1 – Q2 – Control accounts and account reconciliations | Preparation of Partnership accounts

Question on preparing receivables and payables ledger control accounts and the opening statement of financial position for a new partnership.

Question

a) At the close of business on 31 July 2019, the following balances were extracted from the books of Kwabena Ltd, a limited liability company:

Account	Amount (GH¢)
Receivables ledger control account	47,600
Payables ledger control account	37,400

During the month of August, the following transactions occurred:

Transaction	Amount (GH¢)
Cash received from customers	31,800
Cash paid to suppliers	32,500
Sales on credit	48,200
Purchases on credit	36,500
Sales returns	1,900
Purchase returns	700
Discounts received from suppliers	400
Settlement discount claimed by customer	300
Bad debts written off	2,700
Customer and supplier accounts settled by contra	2,100

Required:
Prepare the receivables ledger control account and payables ledger control account for the month of August 2019 and hence determine the balances as at 31 August 2019.
(8 marks)

b) Makor, Degbe, and Sesenyo were in partnership sharing profits one-half, one-third, and one-sixth respectively. On 1 January 2019, they admitted Asinyo into the partnership on the following terms:

Asinyo to have one-sixth share which he purchased from Makor, paying her GH¢20,000 for that share of goodwill. Of this amount, Makor retained GH¢15,000 and put the balance into the firm as additional capital. Asinyo also brought GH¢12,500 capital into the firm.
It was agreed that the investments should be reduced to their market value of GH¢9,000 and that the plant should be reduced to GH¢14,500 as at 31 December 2018.

The Statement of Financial Position of the old firm as at 31 December 2018 was as follows:

Required:
i) Prepare the opening statement of financial position of the new firm as at 1 January 2019.
(6 marks)

ii) Prepare the capital accounts of the partners for the year to 31 December 2019.
(6 marks)

Answer

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Tags: Capital Accounts, Control Accounts, Goodwill, Partnership, Payables, Receivables
Level: Level 1

Topic: Control accounts and account reconciliations, Preparation of Partnership accounts
Series: NOV 2020

FA – May 2019 – L1 – Q2 – Bank reconciliations | Control accounts and account reconciliations

Prepare an adjusted cash book and bank reconciliation statement, and explain errors detected by trial balance and reasons for having control accounts.

Question

a) A bank reconciliation statement matches the cash balance on a company’s cash book to the corresponding amount on its bank statement. Reconciling the two accounts helps determine if accounting changes are needed. Bank reconciliations are completed at regular intervals to ensure that the company’s cash records are accurate. They also help detect fraud and any cash manipulations.

Required:
Identify FOUR (4) features of a bank reconciliation statement.
(4 marks)

b) Nyantakyi Ltd (Nyantakyi) was preparing its reconciliation for the month of November 2018 and noted a difference between its bank statement balance and the balance on the bank account in its general ledger. The bank statement shows a balance of GH¢1,596 cash at the bank, while the bank account in the general ledger shows a balance of GH¢1,022 overdrawn.

The following information was discovered:

i) The bank debited the company’s account with GH¢7,028 for a cheque previously drawn, but the cheque had not yet been presented.
ii) A cheque deposit of GH¢5,950 on 28 November 2018 was not credited by the bank until 2 December 2018.
iii) A cheque of GH¢1,540 incorrectly credited by the bank to Nyantakyi’s account was later reversed by the bank.
iv) A bank loan of GH¢8,000 was credited to Nyantakyi’s account but was not recorded in the cash book.
v) Bank charges of GH¢130 had not been recorded in the cash book.
vi) An interest charge of GH¢60 was debited by the bank but was not recorded in the cash book.

Required:
i) Prepare the adjusted cash book for Nyantakyi Ltd for the month of November 2018. (5 marks)
ii) Prepare the bank reconciliation statement for Nyantakyi Ltd as at 30 November 2018. (5 marks)

c)
i) Errors that can be detected by the trial balance are:

Transposition: A transposition error occurs when digits in a transaction are reversed. For example, recording 654 instead of 564. This can affect the trial balance.
Omission: An omission error occurs when an entry is completely left out. If it’s a one-sided entry, it will affect the trial balance. (2 marks)

ii) Reasons for having control accounts:

They provide a check on the accuracy of entries made in personal accounts in the receivables and payables ledger.
Control accounts assist in the location of errors.
They provide a quick summary of transactions recorded in individual accounts. (3 marks)

Answer

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Tags: Bank Reconciliation, Cash Book, Control Accounts
Level: Level 1

Topic: Bank reconciliations, Control accounts and account reconciliations
Series: MAY 2019

FA – Nov 2017 – L1 – Q1 – Preparation of financial statements of a sole trader

Explain the objectives of financial statements, accrual and going concern concepts, duties of directors, and preparation of payables ledger control account.

Question

a) A businessman who wants to take advantage of the One District One Factory initiative has approached you to assist him with the following accounting issues raised from (i) to (iii):

i) State TWO objectives of financial statements. (2 marks)

ii) Explain the accrual and going concern concepts. (4 marks)

iii) State FOUR duties of directors of a company. (4 marks)

b) From the following information, draw up a Payables ledger control account for the month of October 2017.

Items	GH¢
Payable to Suppliers at 01/10/2017	2,127,721
Receivable from Suppliers at 01/10/2017	127,721
Credit Purchases excluding VAT	4,000,100
VAT on Purchases	123,714
Returns Outwards including VAT	25,100
Cash Purchases excluding VAT	2,150,150
Cheques paid to Suppliers	5,222,100
Discounts received from Suppliers	22,500
Contra entries to Receivables ledger	950

A reconciliation of the books of accounts with some of the suppliers revealed that some of the
products were overpriced leading to an over invoiced amount of GH¢52,330. Amount
receivable from suppliers at 31/10/2017 amounted to GH¢33,100

Answer

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Tags: Accruals, Control Accounts, Director Duties, Financial Statements, Going Concern
Level: Level 1

FA – May 2016 – L1 – Q2 – Control accounts and account reconciliations

Prepare a revised Sales Ledger Control Account, a corrected Schedule of Receivables, and discuss advantages of using control accounts.

Question

(a) The Sales Ledger Control Account of PC Ltd for the year ended 31st December 2014 has been prepared from the following information:

The Sales Ledger Control Account balance, which is part of the double-entry system, failed to agree with the total receivables of GH¢189,380 as shown by the Schedule of Receivables. The following errors were subsequently discovered:

i) A customer had returned goods to PC Ltd at the selling price of GH¢2,400. The goods had been bought on credit. No entries had been made to record the return of the goods in the accounts of PC Ltd.
ii) The discounts allowed column in the cash book had been overcast by GH¢1,080.
iii) No contra entry had been made in the receivables account in the sales ledger in respect of purchases by PC Ltd of goods at a list price of GH¢2,000. PC Ltd received a trade discount of 10% on these goods. This transaction had been correctly dealt with in the Sales Ledger Control Account.
iv) A credit sale of GH¢3,520 to JT Ltd was correctly recorded in the Sales Ledger Control Account, but no other entry had been made.
v) A cheque received from a customer for GH¢6,900, correctly processed through the books, had subsequently been dishonoured. No entries have yet been made to record this dishonoured cheque.
vi) DT Ltd, a customer, has recently been declared bankrupt and the debt of GH¢3,500 is to be written off, but no entries have yet been made.

Required:
a) Prepare a revised Sales Ledger Control Account for the year ended 31 December 2014. (9 marks)
b) Prepare a statement showing the correct total of the Schedule of Receivables for the year ended 31 December, 2014. (5 marks)
c) Discuss TWO advantages to PC Ltd of using control accounts. (6 marks)

Answer

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Tags: Accounting Errors, Control Accounts, Sales Ledger, Schedule of Receivables
Level: Level 1

Topic: Control accounts and account reconciliations
Series: MAY 2016

FA – Nov 2015 – L1 – Q5 – Control accounts and account reconciliations | Inventory

Define inventories and net realisable value under IAS 2, and prepare creditors ledger control accounts for Northern and Southern sectors.

Question

(a) Under the International Financial Reporting Standards, IAS 2 deals with inventories. Define the following terms:
i. Inventories (4 marks)
ii. Net Realisable Value (2 marks)

(b) Alpha Ltd. controls its Creditors’ Accounts by preparing monthly Creditors’ ledger Control Account in two parts, Northern and Southern Sectors.

The following figures were available as at January 31st 2014, when there was a difference of GH¢3,000 on the Trial Balance:

On 31st January, 2014, the officer in charge of the Northern Sector Ledger declared GH¢89,600, while that of the Southern Sector declared GH¢15,016.

You are required to:
i. Prepare Creditors Ledger Control Account for the Northern and Southern Sectors, respectively. (12 marks)
ii. Draw any conclusion you can from the two Control Accounts. (2 marks)

Answer

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Tags: Accounting Reconciliations, Control Accounts, Creditors Ledger, Inventory, Net Realisable Value
Level: Level 1

Topic: Control accounts and account reconciliations, Inventory
Series: NOV 2015

Question Tag: Control Accounts

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FA – May 2012 – L1 – SA – Q17 – Control Accounts

Identifying an advantage not associated with control accounts.

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FA – May 2012 – L1 – SA – Q15 – Control Accounts

Identifying items not credited to the Accounts Payable Control Account.

You're reporting an error for "FA – May 2012 – L1 – SA – Q15 – Control Accounts"

FA – May 2012 – L1 – SA – Q2 – Double-Entry Accounting Principles

Identifying the shortcoming of single entry book-keeping.

You're reporting an error for "FA – May 2012 – L1 – SA – Q2 – Double-Entry Accounting Principles"

FA – Nov 2011 – L1 – SA – Q20 – Control Accounts

This question asks for another name for the Debtors Control Ledger Account.

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

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

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FA – Nov 2011 – L1 – SA – Q3 – Control Accounts

This question tests knowledge on the description and function of control accounts in accounting.

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FA – Nov 2020 – L1 – SA – Q17 – Control Accounts

Identifies items recorded on the credit side of a receivables ledger control account.

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FA – Nov 2020 – L1 – SA – Q6 – Control Accounts

Identifies a feature that does not describe a control account.

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FA – Nov 2012 – L1 – SA – Q7 – Control Accounts

Identifying a source that does not provide information for preparing control accounts.

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FA – May 2014 – L1 – SA – Q7 – Control Accounts

Identifies a feature that is not characteristic of control accounts.

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FA – May 2015 – L1 – Q3a – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)

Prepare Receivables, Payables control accounts, Opening Capital, Statement of Profit or Loss, and Statement of Financial Position using given data from single entry

You're reporting an error for "FA – May 2015 – L1 – Q3a – Recording Financial Transactions (Including Source Documents, Books of Prime Entry, and Cash Books)"

FA – May 2024 – L1 – SB – Q3a – Control Accounts

Lists reasons for differences between a supplier's statement and the ledger account and explains how to identify and resolve these differences.

You're reporting an error for "FA – May 2024 – L1 – SB – Q3a – Control Accounts"

FA – Mar/July 2020 – L1 – SB – Q5 – Control Accounts

Preparation of receivables and payables ledger control accounts, uses of control accounts, and accounting errors not detectable by trial balance.

You're reporting an error for "FA – Mar/July 2020 – L1 – SB – Q5 – Control Accounts"

FA – Nov 2020 – L1 – Q2 – Control accounts and account reconciliations | Preparation of Partnership accounts

Question on preparing receivables and payables ledger control accounts and the opening statement of financial position for a new partnership.

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FA – May 2019 – L1 – Q2 – Bank reconciliations | Control accounts and account reconciliations

Prepare an adjusted cash book and bank reconciliation statement, and explain errors detected by trial balance and reasons for having control accounts.

You're reporting an error for "FA – May 2019 – L1 – Q2 – Bank reconciliations | Control accounts and account reconciliations"

FA – Nov 2017 – L1 – Q1 – Preparation of financial statements of a sole trader

Explain the objectives of financial statements, accrual and going concern concepts, duties of directors, and preparation of payables ledger control account.

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FA – May 2016 – L1 – Q2 – Control accounts and account reconciliations

Prepare a revised Sales Ledger Control Account, a corrected Schedule of Receivables, and discuss advantages of using control accounts.

You're reporting an error for "FA – May 2016 – L1 – Q2 – Control accounts and account reconciliations"

FA – Nov 2015 – L1 – Q5 – Control accounts and account reconciliations | Inventory

Define inventories and net realisable value under IAS 2, and prepare creditors ledger control accounts for Northern and Southern sectors.

You're reporting an error for "FA – Nov 2015 – L1 – Q5 – Control accounts and account reconciliations | Inventory"

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