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.

Accepted Answer

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.

Accepted Answer

Subsidiary ledgers and control accounts allow for detailed records to be kept without the need for a large number of separate accounts in the general ledger. Subsidiary ledgers can record transactions for specific areas such as accounts receivable or accounts payable, while control accounts summarize the information from the subsidiary ledger and provide a balance for the general ledger. This allows for efficient and effective record keeping while also providing a high level of detail when needed.

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.

Accepted Answer

Special journals do not eliminate the need for a general journal, as some transactions may not fit into any specific special journal category and will need to be recorded in the general journal. The other purposes listed, such as reducing the number of postings to the general ledger, reducing the number of entries requiring narrations, and making it easier to find errors, are all served by special journals.

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.

Accepted Answer

The answer of Use the information given below to answer...

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.

Accepted Answer

The statement in D is not necessarily true because the discrepancy could also be due to an error in the control account or in the process of recording transactions in either the control account or the subsidiary ledgers. Errors can occur in either place, not just in the subsidiary ledger.

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.

Accepted Answer

A credit balance in a customer's account in the debtors ledger implies that the customer has paid more than what they owe. This could be due to an overpayment made 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.

Accepted Answer

While the subsidiary ledger provides detailed information about a specific general ledger account, it does not necessarily reflect the components of the double-entry equation as a whole.

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.

Accepted Answer

The answer of Use the information given below to answer...

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.

Accepted Answer

The reason why the general ledger account representing the subsidiary ledger is known as a control account is that it allows for the accuracy of the detailed accounts in the subsidiary ledger to be checked against the aggregate data and balance contained in it. This improves control and helps ensure the accuracy of financial records. Option A is partly correct, but it doesn't fully explain why the account is called a control account. Option C is incorrect because the use of subsidiary ledgers does not eliminate the need to record totals in the general ledger. Option D is incorrect because the control account only includes summary information for the subsidiary ledger, not all transactions.

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.

Accepted Answer

The balance of the allowance for doubtful debts account at 30 June 2012 is $400. This is calculated by adding the increase in allowance for doubtful debts ($300) to the opening balance ($250) and subtracting the bad debts written off ($150).

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

Accepted Answer

The answer of Use the information given below to answer...

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.

Accepted Answer

The copy of receipt given to the customer is the source document for the cash receipts journal, as it provides evidence of the actual cash received for a transaction. The other options are source documents for other journals, such as the cheque duplicate for the cash disbursements journal, the invoice from supplier for the purchases journal, and the duplicate of invoice sent to customer for the sales journal.

Question 13

'Accounts receivable' is a credit column in the:
A) sales journal
B) purchase journal
C) cash receipts journal
D) cash payments journal.

Accepted Answer

The cash receipts journal is used to record all incoming cash transactions, including payments from customers on account. The credit column in this journal is used to record any payments received on account, which would be considered accounts receivable. The other journals listed do not typically include an accounts receivable column.

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.

Accepted Answer

Cost of goods sold is an income statement account and not a subsidiary ledger, which typically contains detailed information about specific accounts like creditors or inventory.

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.

Accepted Answer

In a cash receipts journal, the total of the cash column is debited to the Cash account.

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.

Accepted Answer

Trade discount is not an incentive for prompt payment; it is a reduction in the list price given to customers based on their category or volume of business, not related to payment terms.

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.

Accepted Answer

The answer of Use the information given below to answer...

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.

Accepted Answer

The source document for the purchase journal is the invoice from the supplier. This document provides information such as the date of the purchase, supplier name and address, item description, quantity, prices, and total amount. It is used to record purchases in the purchase journal and to make payments to the supplier. The other options (A, C, and D) are not related to the purchase journal, as they represent documents for other transactions such as payments, sales, or receipts.

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.

Accepted Answer

Debtors control account balance at 1 July 2011 = $10 000
Credit sales = $120 000
Cash sales = $300 000
Cash received from debtors = $90 000
Discount allowed to debtors = $800
Bad debts written off = $150

Total Debtors = $10 000 + $120 000 + $300 000 - $90 000 - $800 - $150 = $329 050

Increase in allowance for doubtful debts = $300
Balance in allowance for doubtful debts at 30 June 2012 = $250
New balance in allowance for doubtful debts = $550

Total Debtors after adjustment = $329 050 - $550 = $328 500

Therefore, the balance of the debtors control account at 30 June 2012 was $39 050 (Debtors control account balance at 30 June 2012 = $39 050 + $550 (allowance for doubtful debts) = $39 600)

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.

Accepted Answer

The duplicate of the invoice sent to the customer is the source document for the sales journal as it provides details of the sale made to a customer, including the date, amount, and products sold. The other options do not provide information about sales made to customers.

Quiz 17: Appendix: Special Journals, subsidiary Ledgers and Control Accounts

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?

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:

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

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

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

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

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

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

'Accounts receivable' is a credit column in the:

Which of the following may NOT be a subsidiary ledger?

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

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

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

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