Control Account

● We got sales ledger control(account receivable control) and purchases

ledger control(account payable control)
● Sales Ledger control account is combining all the accounts receivable to one
account which is under general ledger.
● Purchases Ledger control account is combining all the accounts payable to
one account which is under general ledger.
● It is prepared for simplifying the work of the bookkeeper and while we prepare
trial balance, we directly transfer the account receivable control and account
payable control accounts’ balances to the trial balance only.
● In this chapter, we prepare journal entries and transfer them to our ledger
account.

Control Accounts shown in Statement of Financial Position

Current Asset RM RM

Accounts Receivable (DR+DR)

12,000
Current Liability

Accounts Payable (CR+CR) 11,000

(DR+DR) means the accounts receivable debit balance adds accounts payable debit
balance.
(CR+CR) means the accounts receivable credit balance adds accounts payable credit
balance.

Minority balance
Minority balances mean the abnormal situations occurred in accounts receivable and
accounts payable.

Accounts Receivable - Customers had made an overpayment to us, so we need to

refund them.

Accounts Payable - We overpaid for our supplier, they need to refund us.
Question 1
This following information was extracted from Tian Xu’s books :
RM
Sales Ledger balance as at 1 Jan 2010 12,345
Sales journal from Jan to Dec 189,000
Returns Inwards Journal 5,607
Discounts Allowed 450
Cheque received from customers 190,123
Bad Debts written off 1,000
Bad Debts recovered of 2009 500
Customer’s cheques dishonoured 2,345
Interest charged to customers due to late payment 2,300

You are required to show :

(a) General Journal
(b) Sales Ledger Control
(c) Sales Account

Question 2
Lily gave the information of her purchases ledger to merge and list it to general ledger
systematically.

RM
Purchases Ledger balance as at 1 July 2000 34,567
Purchases Journal from July to June 2001 210,908
Returns Outwards day book 1,204
Discounts Received 1,504
Cheque paid to suppliers 190,123
Interest charged by suppliers due to late payment 3,217

You are required to prepare :

(a) General Journal
(b) Purchases Ledger Control
(c) Purchases Account
Question 3
Shao Xuan is a sole trader who has a full sets of accounts, he decided to transfer all
sales ledger and purchases ledger to general ledger. The following transactions given
as follow :

1 Jan 2020 RM
Sales Ledger debit balance 56,000
Sales Ledger credit balance 1,000
Purchases Ledger debit balance 2,000
Purchases Ledger credit balance 37,000

31 December 2020
Sales on credit 190,465
Cash Sales 290,000
Purchases on credit 100,678
Cash Purchases 190,000
Discounts Allowed 20,000
Discounts Received 17,600
Returns Inwards 800
Dishonoured Cheque from trade receivables 7,098
Returns Outwards 2,000
Contra 8,000
Receipts from customers 250,000
Payment to suppliers 200,890
Bad debts written off 250
Interest Charged to Debtors 1,000

You are required to prepare :

(a) Sales Ledger Control
(b) Purchases Ledger Control
(c) Sales and Discounts Allowed accounts
Question 4
The details given by Yide for preparing sales ledger control and purchases ledger
control from 1 Feb 2020 to 31 Jan 2021.
RM
Sales Ledger debit balance 93,103
Sales Ledger credit balance 2,206
Purchases Ledger debit balance 1,104
Purchases Ledger credit balance 15,609

31 December 2020
Goods purchased on credit 490,465
Cash Sales 167,202
Sold goods on credit 500,678
Cash Purchases 190,040
Discounts Allowed 2,000
Discounts Received 6,600
Returns Inwards 1,090
Dishonoured Cheque from trade receivables 3,908
Returns Outwards 2,000
Transfer of credit balance in Purchases ledger to Sales Ledger 12,280
Receipts from customers 450,070
Payment to suppliers 410,890
Bad debts written off 250
Refund to Debtors for their overpayments 2,206

You are required to prepare :

(a) General Journal
(b) Sales Ledger Control
(c) Purchases Ledger Control
Question 5
B.Y company decided to construct control accounts for Trade receivables ledger and
trade payables ledger to simplify the process of posting ledger balances to trial
balance.

1 Jan 2012 : RM
Trade Receivables debit balance 67,674
Trade Receivables credit balance 839
Trade Payables debit balance 4,663
Trade Payables credit balance 50,930
Goods purchased on credit 160,164
Goods sold on credit 300,987
Cash received from debtors 256,936
Discounts Allowed 6,002
Goods returned to suppliers 2,304
Goods returned by customers 1,903
Accounts settled by contra 2,434
Cash paid to suppliers 156,789
Discounts Received 3,405

31 December 2012 :
Trade Receivables credit balance 1,709
Trade Payables debit balance 2,309

You are required to prepare :

(a) Accounts Receivable Control
(b) Accounts Payable Control
Question 6
The following information was taken from the books of Davis:

2019 RM
Jan 1 Debit balances in Sales Ledger 3,960
Credit balances in Sales Ledger 210
Debit balances in Purchases Ledger 160
Credit balances in Purchases Ledger 2,870

Dec 31 Sales (including RM 4,000 on cash basis) 24,549

Purchases (all on credit) 12,313
Credit notes for goods returned issued to customers 650
Credit notes for goods returned received from suppliers 413
Issued a bill of exchange to a customer Rondo and it was duly 800
accepted
Bill of exchange issued by supplier Lebron and accepted by Davis 720
Cheques received from customers (including a cheque of RM 3,600 9,600
that later returned unpaid)
Cheques issued to suppliers 4,450
Cash refunded to customers for overpayment 200
Cash paid in twice in error to supplier now refunded 110
Customers’ debt written off as irrecoverable 825
Discounts allowed: Cash Discounts 136
: Trade Discounts 219
Discounts received 178
Discounts allowed withdrawn 30
Bad Debts written off now recovered and was totally omitted from 1,200
the books.
Carriage charged by suppliers 90
Interests charged to customers for overdue accounts 28
Transfer from Purchases Ledger to Sales Ledger 1,150
Increase in allowance for doubtful debts 1,328
Rebate given to customer in respect of faulty goods 378
Credit balances in Sales Ledger 666
Debit balances in Purchases Ledger 1,218

You are required to:

(a) Prepare:
(i) Sales Ledger Control Account;
(ii) Purchases Ledger Control Account; and
(Remark: All adjustment should be shown in the Control Accounts.)
(b) Prepare a Statement of Financial Position (extract) as at 31 December 2019
Question 7

(A). The following information was extracted from the books of Yu Ming Trading on
31 December 2019
2019
Jan 1 Sales Ledger Balance Dr. RM52,000
Purchases Ledger Balance Cr. RM32,050
Allowance for Doubtful Debts Cr. RM5,120

RM
Sales (including cash sales RM130,000) 315,000
Bad Debts written off 3,180
Purchases on credit 225,050
Bad Debts recovered 2,500
Returns Outwards 4,860
Discount Received 2,250
Cheque paid to credit supplier 206,100
Legal fee charged to customers 230
Cash purchases 31,125
Refund of overpayment to debtors 167
Discount Allowed 1,950
Cheque received from credit customers 188,100
Contra 1,540
Bills receivable 1,440
Dishonoured cheque recharged to credit customers 4,805
Interest charged to customers for overdue payment 2,250
Sales ledger balance at 31 December 2019 (Cr) 1,159
Purchases ledger balance at 31 December 2019 (Dr) 1,499

Note: After preparing the Sales Ledger Control the accounts assistant realised that 70%
of the cash sales were, in fact, credit sales.

You are required to prepare

(a) Accounts Receivable Control Account;
(b) Accounts Payable Control Account;
Question 8:
Joana keeps control account for her purchases and sales ledger extracted the following
balance from her book of account for the month of June 2020 :

1st June RM

Purchases ledger balance 186 (Dr)

Purchases ledger balance 17,900 (Cr)

Sales ledger balance 28,200 (Dr)

Sales ledger balance 235 (Cr)

Allowance for doubtful debts 120

30th June

Purchases on credit 29,216

Cash purchases 4,820

Bad debts written off 190

Return outwards 1,024

Cash received from customer (included cash sales RM930) 46,930

Goods returned from customer 1,200

Overpayment refund to customer 1,000

Dishonoured cheque recharged to credit customer 315

Sales ledger debit balance transferred to Purchases ledger per contra 450

Transport fee charged by supplier 376

Increase of allowance for doubtful debts 30

Purchases ledger Dr balance at 30th June 212

Sales ledger Dr balance at 30th June 6,200

You are required to

(a) Prepare the Purchases ledger and Sales ledger control account for the month of
June 2020 , balancing at 30th June.
 Question 9
Following were details related to Kang Quan's books for the second half year ended 2019:
2019 RM
Jun-30 Total debit balance of Sales Ledger 23,500
Total credit balance of Sales Ledger 800
Total debit balance of Purchases Ledger 300
Total credit balance of Purchases Ledger 33,000

During the second half year ended 2019:

SaJes Journal 55,800
Purchases Journal 28.800
Returns Inwards Day Book 800
Returns Outwards Day Book 500
Cheque payments made by credit customers after cash discount of 5% 38,900
Payments to credit suppliers afler a cash discount of 6% was allowed 23,500
Customer's cheque dishonoured ,..1, �
Carriage on sales 450
Carriage on purchases 350
Overpayment refunded by suppliers 220
Bad debts written off 300
Transfer from purchases ledger to sales ledger 600

31-Dec Credit balance in Sales Ledger 450

Debit balance in Purchases Ledger 230

You arc required to prepare.

(18%)
a) Salei. and Purchases Ledger Control for the second half year ended 2019;
be1 2019. (2%)
b) Statement of Financial Position (Extract) as at 31 Decem
Question 10:

Terus Maju Company keeps Sales Ledger Control and Purchases Ledger Control Accounts. The following
information is given by the business on 31 January 2019:

RM
Cash purchases 4,500
Cash sales 1,600
Discount Received 1,100
Discount Allowed 880
Payments to suppliers by cheque 18,000
Receipts from customers (including bad debts recovered RM 280) 21,380
1,330
Returns outwards 2,400
Returns inwards 2,220
Bad debts written off 280
Carriage charged by suppliers 310
Interest charged to customers for overdue accounts 80
Overpayment returned by supplier 410
Credit balance in Purchases Ledger transferred to Sales Ledger 170
Debit balance in Sales Ledger transferred to Purchases Ledger 260
Debit balance in Sales Ledger 7,770
Credit balance in Purchases Ledger 4,500
Allowance for Doubtful Debts 295

1. The following information was given at 1 February 2018:

- Debit balance in Sales Ledger RM 8,540
- Credit balance in Purchases Ledger RM 6,700
- Allowance for Doubtful debts RM 225
- Inventory RM 3,020
2. Closing inventory valued at cost RM 3,600 and at net realizable value RM 3,060.
3. The owner had taken goods for his personal use amounted to RM 330. No entry had been made in
the books.

You are required to prepare:

a) Sales Ledger Control and Purchases Ledger Control Accounts for the year ended 31 January 2019;
b) Income statement for the year ended 31 January 2019