In a sales ledger control account, which item is normally recorded on the debit side?
Correct answer: C. Interest charged to customers
- A. Discount allowed to customers
- B. Returns inward from customers
- C. Interest charged to customers
- D. Bad debts written off
Explanation
Interest charged to customers increases the amount receivable and is therefore debited to the sales ledger control account. Discounts, returns and bad debts reduce receivables and are normally credited.
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About Bank Reconciliation and Control Accounts
Bank reconciliation explains differences between the cash book and bank statement through unpresented cheques, outstanding deposits, bank charges, direct payments, credited amounts and recording errors. Control accounts summarise receivables and payables ledgers, and their balances are reconciled with individual accounts to locate discrepancies.
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More Bank Reconciliation and Control Accounts questions
A bank reconciliation statement is prepared after all known bank charges and direct receipts have been entered in the cash book. Which item would still normally appear as a reconciliation item?
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Which item is normally entered in an adjusted cash book before preparing a bank reconciliation statement?
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