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Difficulty: EasySales Ledger Control Account

Which of the following items is posted to the credit side of a Sales Ledger Control Account?

  1. Bad debts written offAnswer
  2. B
    Credit sales for the period
  3. C
    Dishonoured cheques from debtors
  4. D
    Cash refunds given to credit customers

Answer

Bad debts written off is posted to the credit side of the Sales Ledger Control Account.
The item stating 'Bad debts written off' is correct because bad debts reduce the overall receivables owed to the business, which requires a credit entry in the Sales Ledger Control Account.

Step-by-Step Solution

1
Identify the nature of the Sales Ledger Control Account
It represents total trade debtors, which is an asset account with an opening debit balance.
Debits increase the debtors balance, while credits reduce the debtors balance.
2
Analyze the impact of bad debts written off
Writing off bad debts reduces the total amount recoverable from credit customers.
Reductions in debtors balance are recorded on the credit side of the Sales Ledger Control Account.

Key Concept

Posting transactions to the Sales Ledger Control Account
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Topics

Sales Ledger Control Account

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