Prior to reconciliation, the Sales Ledger Control Account of Zainab Enterprises showed a d… — JAMB UTME

Prior to reconciliation, the Sales Ledger Control Account of Zainab Enterprises showed a debit balance of $\text{₦}420,000$ . It was later discovered that a sales return of $\text{₦}18,000$ was erroneously posted to the debit side of the control account, and the discount allowed total of $\text{₦}14,000$ from the cash book was omitted from the control account. What is the correct adjusted balance of the Sales Ledger Control Account?

$\text{₦}370,000$ Answer
B
$\text{₦}388,000$
C
$\text{₦}398,000$
D
$\text{₦}424,000$

Answer

The correct adjusted balance of the Sales Ledger Control Account is

\text{₦}370,000

The unadjusted debit balance is

\text{₦}420,000

. A sales return posted to the debit side requires a double adjustment of

\text{₦}36,000

(

2 \times \text{₦}18,000

) on the credit side to cancel the error and record the return. Additionally, discount allowed reduces debtors, so the omitted total of

\text{₦}14,000

must also be credited. Subtracting

\text{₦}36,000

and

\text{₦}14,000

from

\text{₦}420,000

gives the corrected debit balance of

\text{₦}370,000

Step-by-Step Solution

Calculate the adjustment for the sales return posted to the wrong side

Deduct

\text{₦}36,000

(

2 \times \text{₦}18,000

)

Posting a sales return to the debit side increases debtors instead of reducing them. To correct this, we must remove the incorrect debit of

\text{₦}18,000

and record the correct credit of

\text{₦}18,000

, resulting in a net deduction of

\text{₦}36,000

Calculate the adjustment for the omitted discount allowed

Deduct

\text{₦}14,000

Discount allowed reduces the total amount owed by debtors and must be credited to the Sales Ledger Control Account.

Compute the adjusted balance

\text{₦}420,000 - \text{₦}36,000 - \text{₦}14,000 = \text{₦}370,000

Apply both adjustments to the initial debit balance to obtain the corrected figure.

Key Concept

Correcting errors of commission and omission in the Sales Ledger Control Account

Question

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Key Concept

Common Mistakes

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