Deck 5: Appendix: Special Journals, subsidiary Ledgers and Control Accounts

Question 1

Griffin Ltd made a sale of $800 to a customer on terms of 2.5/10,n/30 on 1 July.The account was paid on 8 July.Griffin Ltd would make which of the following postings to the ledger on 8 July?

A) DR Discount expense $20
B) DR Accounts receivable $800
C) CR Discount revenue $20
D) CR Discount expense $20.

Answer 1

A

Question 2

The most common way of accommodating the need for detailed records in the accounting system,without grossly expanding the number of separate accounts in the general ledger,is to use the technique of:

A) double-entry accounting
B) subsidiary ledgers and control accounts
C) accrual accounting adjustments
D) cash flow statements.

Answer 2

B

Question 3

Which of the following is NOT a purpose served by special journals?

A) reduction in the number of postings to the general ledger
B) elimination of the general journal
C) reduction in number of entries requiring narrations
D) making it easier to find errors.

Answer 3

B

Question 4

Use the information given below to answer the following questions:
Plume Ltd maintains subsidiary ledgers for debtors and creditors. At 1 January 2012, debtors owed $3000 and creditors were owed $5600. Transactions for the month of January 2012 were as follows:
$$\begin{array} { l r } & \$ \\\text { Credit sales } & 9000 \\\text { Cash sales } & 4000 \\\text { Credit purchases } & 16000 \\\text { Cash purchases } & 2000 \\\text { Cash received from debtors } & 8000 \\\text { Cash paid to creditors } & 17000 \\\text { Freight charged to debtors } & 500 \\\text { Charged debtors interest on overdue accounts } & 300 \\\text { Discount received from creditors } & 800 \\\text { Discount allowed to debtors } & 400\end{array}$$

-What was the balance of the debtors control account at 31 January 2012?

A) $8400
B) $4100
C) $3900
D) $4400.

Question 5

Which of the following statements about subsidiary ledgers and control accounts is NOT true?

A) Every entry made to an account in the subsidiary ledger is also reflected in the control account in the general ledger.
B) All credit entries will be the same in aggregate between the subsidiary ledger and the control account.
C) The total of the balances appearing in the accounts in the subsidiary ledger should equal the balance appearing in the control account.
D) If the total of the subsidiary ledger accounts fails to agree with the balance of the control account,the subsidiary ledger must be in error.

Question 6

A credit balance in a customer's account in the debtors ledger could be due to:

A) increased credit sales in the period
B) an overpayment by the customer
C) a bad debt
D) return of goods purchased by the customer.

Question 7

Which of the following statements about a subsidiary ledger is NOT true?

A) The accounts in the subsidiary ledger represent components of the double-entry equation.
B) A subsidiary ledger is a set of ledger accounts that collectively represent a detailed analysis of one general ledger account classification.
C) At any time,the total of the accounts in the subsidiary ledger should equal the balance in the control account.
D) Every entry made to an account in the subsidiary ledger is also reflected in the control account.

Question 8

Use the information given below to answer the following questions:
Plume Ltd maintains subsidiary ledgers for debtors and creditors. At 1 January 2012, debtors owed $3000 and creditors were owed $5600. Transactions for the month of January 2012 were as follows:
$$\begin{array} { l r } & \$ \\\text { Credit sales } & 9000 \\\text { Cash sales } & 4000 \\\text { Credit purchases } & 16000 \\\text { Cash purchases } & 2000 \\\text { Cash received from debtors } & 8000 \\\text { Cash paid to creditors } & 17000 \\\text { Freight charged to debtors } & 500 \\\text { Charged debtors interest on overdue accounts } & 300 \\\text { Discount received from creditors } & 800 \\\text { Discount allowed to debtors } & 400\end{array}$$

-What was the balance of the creditors control account at 31 January 2012?

A) $5800
B) $4600
C) $3800
D) $7400.

Question 9

The general ledger account representing the subsidiary ledger is known as a control account because:

A) inclusion of both control accounts and subsidiary ledger accounts in the general ledger improves control
B) the accuracy of the detailed accounts in the subsidiary ledger can be checked against the aggregate data and the balance contained in it
C) subsidiary ledgers eliminate the need to record totals in the general ledger
D) it includes all transactions in the subsidiary ledger.

Question 10

Use the information given below to answer the following questions:
Features Ltd maintains subsidiary ledgers for debtors and creditors. At 1 July 2011, debtors owed $10 000, creditors were owed $7300, and the balance in allowance for doubtful debts was $250. Transactions for the year ended 30 June 2012 were as follows:
$$\begin{array} { l r } \text { }&\$\\\text { Credit sales } & 120000 \\\text { Cash sales } & 300000 \\\text { Credit purchases } & 80000 \\\text { Cash purchases } & 200000 \\\text { Cash received from debtors } & 90000 \\\text { Cash paid to creditors } & 72000 \\\text { Discount received from creditors } & 1200 \\\text { Discount allowed to debtors } & 800 \\\text { Bad debts written off } & 150 \\\text { Increase in allowance for doubtful debts } & 300\end{array}$$

-What was the balance of the allowance for doubtful debts account at 30 June 2012?

A) $400
B) $300
C) $200
D) $450.

Question 11

Use the information given below to answer the following questions:
Gum Ltd maintains subsidiary ledgers for debtors and creditors. At 1 July 2011, debtors owed $4000, and $7200 was owing to creditors. Transactions for year ended 30 June 2012 were as follows:
$$\begin{array} { l r } \text { }&\$\\\text { Credit sales } & 14000 \\\text { Cash sales } & 3000 \\\text { Credit purchases } & 23000 \\\text { Cash purchases } & 1500 \\\text { Cash received from debtors } & 11000 \\\text { Cash paid to creditors } & 25000\end{array}$$

-What was the balance of the creditors control account at 30 June 2012?

A) $5200
B) $5500
C) $6000
D) $9200

Question 12

Which of these items is the source document for the cash receipts journal?

A) cheque duplicate
B) invoice from supplier
C) duplicate of invoice sent to customer
D) copy of receipt given to customer.

Question 13

'Accounts receivable' is a credit column in the:

A) sales journal
B) purchase journal
C) cash receipts journal
D) cash payments journal.

Question 14

Which of the following may NOT be a subsidiary ledger?

A) creditors
B) property,plant and equipment
C) finished goods inventory
D) cost of goods sold.

Question 15

In posting the total of the cash column in a cash receipts journal,the entry that would be made is:

A) DR Cash
B) CR Cash
C) DR each of the specific accounts that comprise the total
D) CR each of the specific accounts that comprise the total.

Question 16

Which of the following statements about trade discount is NOT true?

A) Trade discount is an incentive for prompt payment.
B) The amount allowed usually depends on the category of the customer or their normal volume of business.
C) Most enterprises record only the net amount of the transaction.
D) The actual price charged is adjusted by the amount of the trade discount.

Question 17

Use the information given below to answer the following questions:
Gum Ltd maintains subsidiary ledgers for debtors and creditors. At 1 July 2011, debtors owed $4000, and $7200 was owing to creditors. Transactions for year ended 30 June 2012 were as follows:
$$\begin{array} { l r } \text { }&\$\\\text { Credit sales } & 14000 \\\text { Cash sales } & 3000 \\\text { Credit purchases } & 23000 \\\text { Cash purchases } & 1500 \\\text { Cash received from debtors } & 11000 \\\text { Cash paid to creditors } & 25000\end{array}$$

-What was the balance of the debtors control account at 30 June 2012?

A) $3000
B) $7000
C) $10 000
D) $14 000.

Question 18

Which of these items is the source document for the purchase journal?

A) cheque duplicate
B) invoice from supplier
C) duplicate of invoice sent to customer
D) copy of receipt sent to customer.

Question 19

Use the information given below to answer the following questions:
Features Ltd maintains subsidiary ledgers for debtors and creditors. At 1 July 2011, debtors owed $10 000, creditors were owed $7300, and the balance in allowance for doubtful debts was $250. Transactions for the year ended 30 June 2012 were as follows:
$$\begin{array} { l r } \text { }&\$\\\text { Credit sales } & 120000 \\\text { Cash sales } & 300000 \\\text { Credit purchases } & 80000 \\\text { Cash purchases } & 200000 \\\text { Cash received from debtors } & 90000 \\\text { Cash paid to creditors } & 72000 \\\text { Discount received from creditors } & 1200 \\\text { Discount allowed to debtors } & 800 \\\text { Bad debts written off } & 150 \\\text { Increase in allowance for doubtful debts } & 300\end{array}$$

-What was the balance of the debtors control account at 30 June 2012?

A) $39850
B) $39 200
C) $39 050
D) $40 000.

Question 20

Which of these items is the source document for the sales journal?

A) cheque duplicate
B) invoice from supplier
C) duplicate of invoice sent to customer
D) copy of receipt sent to customer.

Question 21

Use the information given below to answer the following questions:
Wrigley Ltd uses subsidiary ledgers for debtors and creditors. At 1 July 2011 debtors owed $7000 and creditors were owed $4000. Transactions for year ended 30 June 2012 were as follows:
$$\begin{array} { l r } & \$ \\\text { Cash purchases } & 6000 \\\text { Credit purchases } & 11000 \\\text { Cash sales } & 15000 \\\text { Credit sales } & 20000 \\\text { Cash paid to creditors } & 9000 \\\text { Cash received from debtors } & 18000 \\\text { Discount received from creditors } & 500 \\\text { Discount allowed to debtors } & 700\end{array}$$

-What was the balance of the creditors control account at 30 June 2012?

A) $11 500
B) $6500
C) $5500
D) $6000

Question 22

Wrigley Ltd uses subsidiary ledgers for debtors and creditors. At 1 July 2011 debtors owed $7000 and creditors were owed $4000. Transactions for year ended 30 June 2012 were as follows:
$$\begin{array} { l r } & \$ \\\text { Cash purchases } & 6000 \\\text { Credit purchases } & 11000 \\\text { Cash sales } & 15000 \\\text { Credit sales } & 20000 \\\text { Cash paid to creditors } & 9000 \\\text { Cash received from debtors } & 18000 \\\text { Discount received from creditors } & 500 \\\text { Discount allowed to debtors } & 700\end{array}$$

-What was the balance of the debtors control account at 30 June 2012?

A) $8300
B) $9700
C) $21 300
D) $9000

Question 23

Use the information given below to answer the following questions:
Features Ltd maintains subsidiary ledgers for debtors and creditors. At 1 July 2011, debtors owed $10 000, creditors were owed $7300, and the balance in allowance for doubtful debts was $250. Transactions for the year ended 30 June 2012 were as follows:
$$\begin{array} { l r } \text { }&\$\\\text { Credit sales } & 120000 \\\text { Cash sales } & 300000 \\\text { Credit purchases } & 80000 \\\text { Cash purchases } & 200000 \\\text { Cash received from debtors } & 90000 \\\text { Cash paid to creditors } & 72000 \\\text { Discount received from creditors } & 1200 \\\text { Discount allowed to debtors } & 800 \\\text { Bad debts written off } & 150 \\\text { Increase in allowance for doubtful debts } & 300\end{array}$$

-What was the balance of the creditors control account at 30 June 2012?

A) $14 100
B) $15 300
C) $214 100
D) $8 000