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Accounting Worksheet: Control Accounts - High School
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DPS INTERNATIONAL, TEMA GHANA Department of Commerce Cambridge International Advanced Subsidiary and Advanced Level, [GRADE 9 CANDIDATE’S NAME ACCOUNTING WORKSHEET TOPIC; CONTROL ACCOUNTS INSTRUCTIONS ● Answer all questions . INFORMATION ● The number of marks for each question or part of the question is shown in brackets [ ]. 1 Samir buys and sells on credit. He has provided the following information. 2023 1 January $ 10 115 Total trade receivables 31 December Totals for the year: Cash sales Credit sales Returns from credit customers Bank transfers received from credit customers Cash received from credit customers Interest charged on overdue sales ledger accounts Contra entries Discount allowed to credit customers 136 900 124 670 5 234 98 620 11 470 139 1 833 3 125 In addition, one of Samir’s trade receivables, Ria, has become bankrupt and Samir will not receive the $178 which she owes to him. Samir thinks he will receive most of the other amounts due to him from his trade receivables. REQUIRED (a) (i) Prepare the journal entry to write off the amount owed by Ria. A narrative is required. Samir Journal Date Details Debit $ Credit $ ................. ............................................................... ...................... ...................... ................. ............................................................... ...................... ...................... ................. ............................................................... ...................... ...................... ................. ............................................................... ...................... ...................... [3] (ii) State two reasons why Samir should use a provision for doubtful debts account. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] Page 1 of 25 (b) Prepare Samir’s sales ledger control account for the year ended 31 December 2023. Balance the account and bring down the balance at 1 January 2024. Samir Sales ledger control account Date Details $ Date Details $ ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. [9] Page 2 of 25 Samir is concerned about his ability to pay his trade payables. He is considering whether to stop allowing cash discount to his credit customers so that he will have more cash coming in and can pay his trade payables more easily. REQUIRED (c) (i) Advise Samir whether or not to stop allowing cash discount. Justify your answer by providing advantages and disadvantages of stopping cash discount to his credit customers. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [5] (ii) Suggest one other action which Samir could take to ensure that he has sufficient cash to pay his trade payables. ........................................................................................................................................... ..................................................................................................................................... [1] [Total: 20] Page 3 of 25 2 Addo is a trader who only sells on credit. His trade receivables at 1 April 2024 were as follows: $ Nuru 920 Mahia 1145 Ava 1378 Rachel 215 3658 During April 2024, the following transactions took place: April 2 Sold goods to Ava, list price $150, less 6% trade discount 9 Received telephone transfer from Ava, $689 12 Sold goods to Nuru, $165 13 Received cheque, $627, from Mahia, in full settlement of an invoice for $660 19 Received $760 from Nuru by electronic transfer. Nuru had deducted 5% cash discount 20 Nuru returned goods $30 21 Sold goods to Mahia, list price $480, trade discount 5%, cash discount 5% if invoice paid within 30 days 30 Rachel has become bankrupt and Addo decides to write off the amount owing from her, as irrecoverable REQUIRED (a) Prepare the sales journal for April 2024. Total the sales journal and indicate the ledger account to which the total would be posted. Addo Sales journal Date Details $ $ ............. ............................................... ............... ............... ............. ............................................... ............... ............... ............. ............................................... ............... ............... ............. ............................................... ............... ............... ............. ............................................... ............... ............... [3] Page 4 of 25 (b) Prepare the journal entry to write off the amount owing by Rachel. A narrative is required. Addo Journal Date Details $ $ ............. ............................................... ............... ............... ............. ............................................... ............... ............... ............. ............................................... ............... ............... ............. ............................................... ............... ............... ............. ............................................... ............... ............... [3] (c) Calculate: (i) the total amount of money which Addo received from trade receivables during April 2024. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [1] (ii) the total amount of cash discount which Addo allowed in April 2024. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] Page 5 of 25 (d) Prepare Addo’s sales ledger control account for April 2024. Addo Sales ledger control account Date Details $ Date Details $ ............. ................................. ............ ............ ................................. ............ ............. ................................. ............ ............ ................................. ............ ............. ................................. ............ ............ ................................. ............ ............. ................................. ............ ............ ................................. ............ ............. ................................. ............ ............ ................................. ............ ............. ................................. ............ ............ ................................. ............ ............. ................................. ............ ............ ................................. ............ [6] Addo is considering changing his credit terms. He would introduce more credit checks on new customers and would increase cash discount to 7½% for payment within 30 days. REQUIRED (e) Advise Addo whether or not he should make these changes to his credit terms. Justify your answer by providing two advantages and two disadvantages of changing his credit terms. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] Page 6 of 25 [Total: 20] 3 Lucas is a trader. He has provided the following information. $ Balances at 1 January 2023 Sales ledger control account 14 940 debit Purchases ledger control account 8 450 credit Totals for January 2023 Credit sales 12 736 Cash sales 3 992 Credit purchases 7 325 Returns to credit suppliers 463 Returns from credit customers 920 Cash received from credit customers 685 Bank transfers received from credit customers 10 620 Bank payments to credit suppliers 6 675 Irrecoverable debts written off 140 Discount received 210 Contra entries 180 Interest charged on overdue purchases ledger accounts 166 REQUIRED (a) Prepare the sales ledger control account for January 2023. Balance the account and bring down the balance at 1 February 2023. Page 7 of 25 Lucas Sales ledger control Date Details $ Date Details $ ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. [6] (b) Prepare the purchases ledger control account for January 2023. Balance the account and bring down the balance at 1 February 2023. Lucas Purchases ledger control Date Details $ Date Details $ ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. [7] Page 8 of 25 (c) State two advantages of preparing control accounts. 1 ................................................................................................................................................ ................................................................................................................................................... 2 ................................................................................................................................................ ................................................................................................................................................... [2] One of Lucas’s suppliers has demanded immediate payment of the $3900 due to him. Lucas does not have sufficient cash to pay this amount. He is considering selling some office equipment which had cost $6000 and has been fully depreciated. Lucas has been offered $2500 cash for this equipment. REQUIRED (d) Advise Lucas whether he should sell this office equipment in order to pay the supplier. Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Total: 20] Page 9 of 25 4 Ravi is a trader. He provided the following information. 2021 1 February Sales ledger control account debit balance Sales ledger control account credit balance 2022 31 January Totals for the year: Credit sales Cash sales Bank transfers received from credit customers Cash received from credit customers Returns from credit customers Irrecoverable debts written off Contra entries Discount allowed Discount received Interest charged on overdue sales ledger accounts Sales ledger control account debit balance Sales ledger control account credit balance $ 12 510 1 245 134 000 4 625 96 250 12 890 4 000 9 100 1 677 4 643 2 119 1 104 ? nil REQUIRED (a) Prepare Ravi’s sales ledger control account for the year ended 31 January 2022. Balance the account and bring down the balance on 1 February 2022. Ravi Sales ledger control account Date Details $ Date Details $ ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. ............. .................................. ............. Page 10 of 25 [10] (b) State the accounting principle which is being applied when irrecoverable debts are written off. ............................................................................................................................................. [1] (c) Explain why the following interested parties want to know the level of Ravi’s trade receivables. (i) Bank manager ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] (ii) Trade payables ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... ..................................................................................................................................... [2] Ravi sends out statements of account to credit customers and charges interest on overdue accounts. He is concerned about the loss caused to his business by irrecoverable debts. He is considering employing a part-time credit controller to contact credit customers by telephone and to start legal action on overdue accounts if necessary. The credit controller would be paid $6800 per annum. REQUIRED (d) Advise Ravi whether or not he should employ the credit controller. Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Total: 20] Page 11 of 25 5 GHB Limited maintains a full set of accounting records and prepares monthly control accounts. The following information was provided for November 2019. $ Purchases ledger control account balance at 1 November ? Totals for November: Purchases journal Purchases returns journal Cash purchases Commission receivable Cash discount received Cash discount allowed Cheques paid to trade payables Sales ledger contras Interest charged by trade payables Cheque refunds from trade payables 14 200 1 160 5 390 2 110 650 710 11 420 250 95 330 Purchases ledger control account balance at 30 November 13 195 REQUIRED (a) Prepare the purchases ledger control account for GHB Limited for November 2019. Balance the account on 30 November 2019 and bring down the balance on 1 December 2019. GHB Limited Purchases ledger control account Date Details $ Date Details $ ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... ……….... …………………………………… ………..... Page 12 of 25 [9] A delivery vehicle was purchased by cheque during November 2019. REQUIRED (b) State two reasons why the purchase of the delivery vehicle was not recorded in the purchases ledger control account. 1 ................................................................................................................................................ ................................................................................................................................................... 2 ................................................................................................................................................ .............................................................................................................................................. [2] (c) (i) State the most appropriate method of depreciation for the new delivery vehicle. ...................................................................................................................................... [1] (ii) State three reasons for your answer to (c) (i). 1 ......................................................................................................................................... ........................................................................................................................................... 2 ......................................................................................................................................... ........................................................................................................................................... 3 ......................................................................................................................................... ...................................................................................................................................... [3] Page 13 of 25 The directors of GHB Limited are planning to finance a major expansion of the fleet of delivery vehicles. $250 000 will be required for this expansion. The directors are considering whether to issue additional ordinary shares or to obtain a long-term bank loan. REQUIRED (d) Advise the directors which of these two methods of finance is more appropriate. Justify your answer with one advantage and one disadvantage of each option. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ............................................................................................................................................. [5] [Total: 20] Page 14 of 25 6 Kamika is a clothing wholesaler who buys and sells on both cash and credit terms. She maintains a full set of accounting records and prepares monthly control accounts. REQUIRED (a) State two advantages to Kamika of preparing a monthly sales ledger control account. 1 ................................................................................................................................................ ................................................................................................................................................... 2 ................................................................................................................................................ ...............................................................................................................................................[2] (b) State two reasons why it is possible for Kamika to have a credit balance on her sales ledger control account. 1 ................................................................................................................................................ ................................................................................................................................................... 2 ................................................................................................................................................ ...............................................................................................................................................[2] (c) Complete the following table. Place a tick (3) to show where each item would appear in Kamika’s purchases ledger control account. If the item would not appear, place a tick (3) in the no entry column. debit credit no entry opening balance owed to credit suppliers credit purchases cash purchases cash discount received trade discount received cheques paid to credit suppliers interest charged by credit suppliers returns to credit suppliers contra between sales and purchases ledgers [9] Page 15 of 25 7 Lydia is a trader. She keeps a full set of accounting records and prepares control accounts at the end of each month. REQUIRED (a) Name the book of prime (original) entry which Lydia would use to obtain the following information when preparing her control accounts. Book of prime (original) entry Returns by credit customers Bad debts written off [2] Lydia was able to provide the following information for the month ended 30 April 2018. 2018 April 1 Amount owing by credit customers Amount owing to credit suppliers April 30 Totals for the month Cash purchases Credit purchases Returns to credit suppliers Returns from credit customers Cheques received from credit customers Discount allowed Discount received Contra entry Carriage charged by credit supplier May 1 Debit balance in purchases ledger Credit balance in purchases ledger $ 3944 4215 996 4855 113 236 3332 68 95 250 210 100 4237 REQUIRED (b) Select the relevant figures and prepare the purchases ledger control account for the month of April 2018. Insert a figure for cheques paid to credit suppliers. Balance the account and bring down the balances on 1 May 2018. Page 16 of 25 Lydia Purchases ledger control account Date Details $ Date Details $ ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. ............ .................................... .............. [9] (c) Suggest two reasons for the debit balance in the purchases ledger on 1 May 2018. 1 ................................................................................................................................................ ................................................................................................................................................... 2 ................................................................................................................................................ ...............................................................................................................................................[2] Page 17 of 25 Lydia is proposing to create and maintain a provision for doubtful debts at 2½% of trade receivables at the end of each financial year. REQUIRED (d) Explain how maintaining a provision for doubtful debts is an example of the application of the principle of prudence. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[2] Lydia allows her credit customers a cash discount of 2% if accounts are settled within 30 days. From 1 June 2018 Lydia is proposing to offer a cash discount of 3% if accounts are settled within 21 days. REQUIRED (e) Discuss how this proposal could affect Lydia’s: (i) future liquidity ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... .......................................................................................................................................[2] (ii) future profit for the year. ........................................................................................................................................... ........................................................................................................................................... ........................................................................................................................................... .......................................................................................................................................[2] [Total: 19] Page 18 of 25 8 Mahendra’s financial year ends on 31 August. He buys and sells on both cash and credit terms and maintains a full set of accounting records. Mahendra prepares control accounts at the end of each month. REQUIRED (a) Complete the following table. Use a tick () to show where each of the following items would appear in Mahendra’s sales ledger control account. If the item does not appear place a tick in the “no entry” column. debit credit no entry opening balance owed by credit customers credit sales cash sales provision for doubtful debts bad debts written off cash discount allowed to credit customers trade discount allowed to credit customers contra between sales and purchases ledgers cash received from credit customers [9] (b) Name the book of prime (original) entry which Mahendra would use to obtain the following information when preparing his purchases ledger control account. book of prime (original) entry returns to credit suppliers discount received interest charged by credit supplier contra entry to sales ledger control account [4] (c) (i) State the meaning of a contra entry in connection with control accounts. ........................................................................................................................................... ...................................................................................................................................... [1] (ii) State why such an entry may be necessary. ........................................................................................................................................... ...................................................................................................................................... [1] Page 19 of 25 9 Amira’s financial year ends on 30 September. She buys and sells on both cash and credit terms and maintains a full set of accounting records. Control accounts are prepared at the end of each month. REQUIRED (a) Name the book of prime (original) entry which Amira would use to obtain the following information when preparing her sales ledger control account. Book of prime (original) entry Cheque refund to credit customer Bad debts written off Returns by credit customers Interest charged on customer’s overdue account [4] (b) State two reasons why Amira prepares a purchases ledger control account. 1 ........................................................................................................................................... ................................................................................................................................................... 2 ........................................................................................................................................... .............................................................................................................................................. [2] Amira provided the following information for September 2016. September 1 Debit balances in purchases ledger Credit balances in purchases ledger $ 93 4210 September 30 Totals for the month Credit purchases Cash purchases Cheques paid to credit suppliers Cheques received from credit customers Discount allowed Discount received Returns to credit suppliers Interest charged by supplier on overdue account Cash refund received from credit supplier Contra entry 5366 1469 3705 6102 204 95 197 12 150 494 October 1 Debit balances in purchases ledger Credit balances in purchases ledger Page 20 of 25 68 ? REQUIRED (c) Select the relevant figures and prepare the purchases ledger control account for the month of September. Balance the account and bring down the balances on 1 October 2016. Amira Purchases ledger control account Date Details $ Date Details $ ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ............................... ........... ........... ............................... ........... ............ ................................. ........... ........... ............................... ........... ........... ................................. .......... .......... ............................... .......... [12] (d) Suggest one advantage of paying credit suppliers before the due date. ................................................................................................................................................... .............................................................................................................................................. [1] (e) Suggest one disadvantage of paying credit suppliers before the due date. ................................................................................................................................................... .............................................................................................................................................. [1] [Total: 20] Page 21 of 25 (a) Insert the missing figures in the following document. CREDIT NOTE Jai Kapur 44 West Street Hightown Vijay Singh 11 North Road Lowtown Quantity 4 25 April 2015 Description External doors Less (i)...............% trade discount Unit price $ 55 Amount $ 220 33 (ii) ............ 20 metres Floorboards 1.50 ....30... (iii)........... (b) Name the person who issued the credit note. (c) Suggest one reason for the issue of the credit note. (d) Name the document which would have been issued to request a credit note. (e) Complete the following table to show where the credit note would be recorded. Page 22 of 25 Vijay Singh maintains a full set of accounting records and prepares control accounts at th each month. He provided the following information. 2015 April 1 Debit balance on sales ledger control account 30 Totals for the month Sales journal Sales returns journal Cash sales Cheques received from credit customers Cheque received from credit customer (included in the above figure) later dishonoured Cheques paid to credit suppliers Discounts allowed Discounts received Bad debts written off Interest charged to credit customer Contra entry to purchases ledger May 1 Debit balance on sales ledger control account Credit balance on sales ledger control account Page 23 of 25 $ 475 590 46 614 387 26 469 13 34 32 8 150 ? 21 EQUIRED Select the relevant figures and prepare Vijay Singh’s sales ledger control account fo month ended 30 April 2015. Balance the account and bring down the balances on 1 May 2015. Vijay Singh Sales ledger control account Date Details $ Date Details $ ….…. ……………..…..………. …..…. ……… ………....…………… …..….. …….. ……………....……… …..…. ….….. ………..…..………… …..…. ….…. ……………....……… …..…. …..…. ………..……..……… …..…. ….…. ……………....……… …..…. …..…. ………..……..……… …..…. ….…. ……………....……… ……... …..…. ………..……..……… …..…. ….…. ……………….……… …..…. …..…. ………..……..……… …..…. ….…. ………..……..……… ….…. …..…. ………..……..……… …..…. ….…. ………..……..……… ….…. …..…. ………..……..……… …..…. ….…. ………..……..……… ….…. …..…. ………..……..……… …..…. ….…. ………..……..……… ….…. …..…. ………..……..……… …..…. Explain the contra entry to the purchases ledger. Page 24 of 25 State one reason why Vijay Singh prepares a monthly sales ledger control account. State two reasons why Vijay Singh does not use the information contained in the ledger to prepare the sales ledger control account. 1 2 [Tota Page 25 of 25
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