Question

In the books of Ade, prepare the Kristy, Erica, Kofi, Mary, and Total control accounts given: discount received from Kristy GHC300, balance b/f for Kristy GHC4,200, payment to Kristy GHC3,900; goods returned to Erica GHC1,500, discount received from Erica GHC600, balance b/f for Erica GHC8,700, payment to Erica GHC6,600; goods returned to Kofi GHC900, purchases from Kofi GHC17,400 and GHC14,100; balance c/d for Mary GHC10,500, purchases from Mary GHC10,500.

Accepted Answer

Kristy Control Account: Discount received 300 + Payment 3,900 = 4,200 (Dr); Balance b/f 4,200 (Cr). Balances.

Erica Control Account: Goods returned 1,500 + Discount received 600 + Payment 6,600 = 8,700 (Dr); Balance b/f for Erica 8,700 (Cr). Balances.

Kofi Control Account: Goods returned 900 + Balance c/d 30,600 = 31,500 (Dr); Purchases from Kofi 17,400 + 14,100 = 31,500 (Cr). Balances.

Mary Control Account: Balance c/d 10,500 (Dr) = Purchases from Mary 10,500 (Cr). Balances.

Total (Purchases Ledger) Control Account:
Dr side: Discount received from Kristy 300; Payment to Kristy 3,900; Goods returned to Erica 1,500; Discount received from Erica 600; Payment to Erica 6,600; Goods returned to Kofi 900; Balance c/d 41,000 = Total 54,900
Cr side: Balance b/f for Kristy 4,200; Balance b/f for Erica 8,700; Purchases from Kofi 17,400; Purchases from Kofi 14,100; Purchases from Mary 10,500 = Total 54,900

Note: the simple rule is that any transaction that reduces a debt is recorded on the debit side, and any transaction that increases a debt is recorded on the credit side of the control account.

NECO Accounting 2022 Theory — Question 9

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