Control Accounts and Bank Reconciliation Practice Questions — JAMB UTME

Question 1Question →

Match each bank-related transaction on the left to its correct accounting treatment on the right during the preparation of an Adjusted Cash Book and Bank Reconciliation Statement.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Standing order payments are credited to the Adjusted Cash Book; direct customer deposits are debited to the Adjusted Cash Book; issued cheques not yet cleared are treated as unpresented cheques in the Bank Reconciliation Statement; and deposited cheques not yet credited are treated as uncredited deposits in the Bank Reconciliation Statement.

Standing orders represent unrecorded cash payments and are credited to the Adjusted Cash Book. Direct customer deposits represent unrecorded cash receipts and are debited to the Adjusted Cash Book. Unpresented cheques and uncredited deposits are timing differences and are placed in the Bank Reconciliation Statement.

Step-by-Step Solution

1

Identify items that require Cash Book adjustment

Standing orders and direct deposits are unrecorded bank transactions that must be entered into the Cash Book before reconciliation.

The Cash Book must reflect all actual bank transactions (charges, interest, direct debits, standing orders, and credit transfers) prior to reconciling timing differences.

2

Determine debit/credit entries for Adjusted Cash Book items

Direct customer deposits increase cash (debit entry); standing order insurance payments decrease cash (credit entry).

Cash Book follows double-entry rules where cash receipts are debited and cash payments are credited.

3

Identify timing differences for the Bank Reconciliation Statement

Unpresented cheques and uncredited deposits are placed directly into the Bank Reconciliation Statement.

Timing differences occur due to time lags in bank processing and are already recorded in the Cash Book, so they do not alter the Adjusted Cash Book balance.

Key Concept

Distinguishing between items that adjust the Cash Book (unrecorded transactions and cash book errors) and items that belong in the Bank Reconciliation Statement (timing differences such as unpresented cheques and uncredited lodgements).

Question 2Question →

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

Bad debts written off

Credit sales for the period

Dishonoured cheques from debtors

Cash refunds given to credit customers

Show answer & explanation

Answer: Bad debts written off

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

Question 3Question →

Match each transaction item affecting the Purchases Ledger Control Account with its appropriate debit or credit entry classification.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Credit Purchases matches with Credited to record an increase in payables; Discount Received matches with Debited to reflect a reduction in owed amounts; Dishonoured Cheques match with Credited to reinstate liability; Returns Outwards matches with Debited to reduce trade payables.

The Purchases Ledger Control Account acts as a summary of the accounts payable ledger. Credit purchases increase the liability to suppliers (credited), while dishonoured cheques reinstate a previously reduced liability (credited). Conversely, allowances like discounts received and returns of merchandise lower the payable amount (debited).

Step-by-Step Solution

1

Identify transactions that increase trade payables liability

Credit purchases and dishonoured cheques increase liability.

Control accounts track total balances; items increasing trade liability belong on the credit side of the Purchases Ledger Control Account.

2

Identify transactions that decrease trade payables liability

Discount received and returns outwards decrease liability.

Reductions in payable balance belong on the debit side of the Purchases Ledger Control Account.

3

Pair each left item to its corresponding right item description

Matches established: left_1 to right_1, left_2 to right_2, left_3 to right_3, left_4 to right_4.

Direct alignment of basic double entry control rules for trade payables.

Key Concept

Purchases Ledger Control Account Debit and Credit Classifications

Question 4Question →

As at 31st December 2025, the Cash Book (bank column) of Zenith Enterprises showed an unadjusted credit balance (overdraft) of $\text{NGN } 14,500$ . Upon audit and comparison with the Bank Statement, the following discrepancy items were identified:

Item	Transaction Details	Amount (NGN)
1	Bank charges and interest on overdraft not entered in Cash Book	$2,050$
2	Direct remittance by a customer credited directly by the bank	$5,400$
3	Cheque issued to a supplier for $\text{NGN } 3,100$ incorrectly credited in Cash Book as	$1,300$
4	Cheques drawn and issued to creditors but not yet presented at bank	$8,900$
5	Cheques lodged into the bank account but not yet credited by bank	$6,200$
6	Standing order for annual subscriptions debited by bank only	$2,000$
7	Customer's cheque previously deposited, now returned dishonoured	$1,500$

What is the amount of the bank overdraft per the Bank Statement as at 31st December 2025?

Show answer & explanation

Answer: 13750

Answer

The bank overdraft per the Bank Statement as at 31st December 2025 is NGN 13,750.

To find the Bank Statement balance, first adjust the Cash Book overdraft of NGN 14,500. Add omitted payments and corrections (bank charges NGN 2,050, cheque under-recording NGN 1,800, standing order NGN 2,000, dishonoured cheque NGN 1,500) to get an overdraft subtotal of NGN 21,850. Subtract the direct credit of NGN 5,400 to obtain an Adjusted Cash Book overdraft of NGN 16,450. Reconciling to the bank statement: add uncredited lodgements of NGN 6,200 and subtract unpresented cheques of NGN 8,900, yielding a Bank Statement overdraft of NGN 13,750.

Step-by-Step Solution

1

Calculate net Cash Book adjustments

Additional debits (increasing overdraft): Bank charges and interest (NGN 2,050) + Cheque error correction (NGN 3,100 - NGN 1,300 = NGN 1,800) + Standing order (NGN 2,000) + Dishonoured cheque (NGN 1,500) = NGN 7,350. Additional credits (reducing overdraft): Direct customer credit = NGN 5,400.

Unrecorded payments and under-recorded credit entries increase the Cash Book overdraft, while unrecorded receipts reduce it.

2

Determine the Adjusted Cash Book Balance

Adjusted Cash Book Overdraft = NGN 14,500 + NGN 7,350 - NGN 5,400 = NGN 16,450.

Adjusting the initial overdraft balance for all items omitted or misposted in the Cash Book.

3

Calculate the Bank Statement Overdraft Balance

Bank Statement Overdraft = Adjusted Cash Book Overdraft (NGN 16,450) + Uncredited Lodgements (NGN 6,200) - Unpresented Cheques (NGN 8,900) = NGN 13,750.

Uncredited lodgements increase the bank's perception of overdraft relative to the adjusted cash book, while unpresented cheques reduce the bank statement overdraft.

Key Concept

Preparation of Adjusted Cash Book and Bank Reconciliation Statement under overdraft conditions

Estimated Time:3m 0s

Question 5Question →

Match each cause of discrepancy between the Cash Book and the Bank Statement with its correct accounting description.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Unpresented Cheques match with cheques issued to suppliers that have not yet been presented to the bank for payment; Uncredited Deposits match with cheques received and paid into the bank but not yet credited on the bank statement; Standing Order matches with an instruction given by an account holder to the bank to make regular fixed payments directly from the account.

Each discrepancy term correctly corresponds to its distinct operational meaning in bank reconciliation analysis.

Step-by-Step Solution

1

Define Unpresented Cheques

Unpresented cheques refer to cheques issued to pay creditors which have not yet been cleared by the bank.

They cause the Cash Book balance to be lower than the Bank Statement balance until presented.

2

Define Uncredited Deposits

Uncredited deposits refer to cheques or cash lodged into the bank that have not yet been credited to the customer's account by the bank.

They cause the Cash Book balance to be higher than the Bank Statement balance until credited.

3

Define Standing Order

A standing order is an automatic transaction initiated by the bank following standing written instructions from the customer.

It appears on the Bank Statement as a debit entry before being entered into the Cash Book.

Key Concept

Causes of Discrepancies Between Cash Book and Bank Statement

Question 6Question →

The following financial transactions and balances were extracted from the accounting records of Adeola Enterprises for the year ended 31st December 2024:

Item / Transaction	Amount ( $₦$ )
Sales ledger balance at 1st Jan 2024 (Debit)	45,000
Sales ledger balance at 1st Jan 2024 (Credit)	1,200
Total credit sales	185,000
Cash refunds paid to credit customers	3,400
Dishonoured cheques from customers	4,500
Bad debts written off	5,200
Discount allowed to customers	2,800
Provision for doubtful debts created	4,000
Contra entry (set-off against Purchases Ledger)	6,500
Sales returns and allowances	3,100
Sales ledger balance at 31st Dec 2024 (Credit)	1,800
Sales ledger balance at 31st Dec 2024 (Debit)	52,600

What was the total amount of cash and cheques received from debtors during the year?

₦168,300

₦164,300

₦161,500

₦173,900

Show answer & explanation

Answer: ₦168,300

Answer

₦168,300

The correct figure of ₦168,300 is obtained by setting up the Sales Ledger Control Account. The debit side consists of Opening Debit Balance (₦45,000), Credit Sales (₦185,000), Cash Refunds to Debtors (₦3,400), Dishonoured Cheques (₦4,500), and Closing Credit Balance (₦1,800), totaling ₦239,700. The known credit items are Opening Credit Balance (₦1,200), Bad Debts (₦5,200), Discount Allowed (₦2,800), Contra Set-off (₦6,500), Sales Returns (₦3,100), and Closing Debit Balance (₦52,600), totaling ₦71,400. Subtracting ₦71,400 from ₦239,700 gives ₦168,300 as the cash received. Provision for doubtful debts is completely excluded.

Step-by-Step Solution

1

Identify and sum all items that belong on the DEBIT side of the Sales Ledger Control Account.

Total Debit items = Opening Debit Balance (

₦45,000

) + Credit Sales (

₦185,000

) + Cash Refunds to Debtors (

₦3,400

) + Dishonoured Cheques (

₦4,500

) + Closing Credit Balance (

₦1,800

) =

₦239,700

.

Debit side increases trade receivables balance and includes closing credit balances carried down.

2

Identify items that belong on the CREDIT side of the Sales Ledger Control Account (excluding cash received).

Known Credit items = Opening Credit Balance (

₦1,200

) + Bad Debts (

₦5,200

) + Discount Allowed (

₦2,800

) + Contra Set-off (

₦6,500

) + Sales Returns (

₦3,100

) + Closing Debit Balance (

₦52,600

) =

₦71,400

. Note: Provision for doubtful debts is NOT included in control accounts.

Credit side items decrease trade receivables or represent closing debit balances carried down.

3

Calculate missing Cash Received by subtracting total known credit items from total debit items.

Cash Received =

���239,700 - ₦71,400 = ₦168,300

.

The control account must balance double-entry totals.

Key Concept

Sales Ledger Control Account Reconstruction

Question 7Question →

Before preparing the final accounts of Okon & Sons, the Sales Ledger Control Account balance was $₦145,800$ . A subsequent audit revealed the following errors:
1. The total of the Sales Day Book was posted to the Sales Ledger Control Account as $₦45,200$ instead of the correct total of $₦54,200$ .
2. Discount allowed of $₦3,400$ was entered in the Sales Ledger Control Account as $₦4,300$ .
3. A contra entry of $₦2,500$ set off against the Purchases Ledger Control Account was omitted entirely from the Sales Ledger Control Account.
4. Bad debts written off of $₦1,800$ were posted to individual debtors' accounts but omitted from the Sales Ledger Control Account.
5. A dishonoured cheque of $₦4,000$ was posted correctly in the Sales Ledger Control Account but entered as $₦400$ in the customer's individual account.

Calculate the corrected Sales Ledger Control Account balance after all necessary adjustments.

Show answer & explanation

Answer: 151400

Answer

The corrected Sales Ledger Control Account balance is 151,400

To arrive at the corrected Sales Ledger Control Account balance, only adjustments affecting the general ledger control account must be processed: add the ₦9,000 under-posted sales day book total, add ₦900 to correct the over-credited discount allowed, subtract ₦2,500 for the omitted contra entry, and subtract ₦1,800 for the omitted bad debt. The posting error in the individual debtor's personal account (item 5) does not affect the control account. Therefore,

145,800 + 9,000 + 900 - 2,500 - 1,800 = 151,400

.

Step-by-Step Solution

1

Identify the unadjusted control account balance

Unadjusted Balance = ₦145,800 (Debit)

This is the starting point before error corrections.

2

Calculate adjustment for Sales Day Book posting error

Add ₦9,000 (₦54,200 - ₦45,200)

Sales Day Book total increases debtors, so under posting on the debit side of the control account requires a debit addition.

3

Calculate adjustment for Discount Allowed overstatement

Add ₦900 (₦4,300 - ₦3,400)

Discount allowed reduces debtors (credited to control account). Crediting ₦4,300 instead of ₦3,400 reduced the control account by ₦900 too much; hence, ₦900 must be debited back.

4

Adjust for omitted contra entry and bad debts

Deduct ₦2,500 (Contra) and deduct ₦1,800 (Bad debts)

Both contra entries and bad debts write-offs reduce total receivables and belong on the credit side of the Sales Ledger Control Account.

5

Evaluate subsidiary ledger error impact

No adjustment to control account for item 5

Errors in individual customer subsidiary ledger accounts affect the list of debtors/schedule of balances, not the control account in the general ledger.

6

Compute final corrected balance

145,800 + 9,000 + 900 - 2,500 - 1,800 = 151,400

Sum of initial balance and all valid general ledger control adjustments.

Key Concept

Control Account Adjustment vs Subsidiary Ledger Reconciliation

Question 8Question →

On 31st December 2025, the Cash Book of Folake Trading Enterprise showed an overdrawn bank balance of $\text{NGN } 14,800$ . Upon comparing the Cash Book with the Bank Statement, the accountant identified the following items:

1. Unpresented cheques totaling $\text{NGN } 6,200$
2. Uncredited lodgements amounting to $\text{NGN } 4,500$
3. A direct credit transfer from a customer, Mr. Audu, of $\text{NGN } 3,400$ recorded only on the bank statement
4. Bank charges debited by the bank amounting to $\text{NGN } 850$
5. A standing order payment for business insurance of $\text{NGN } 1,200$ paid by the bank but not entered in the Cash Book
6. A cheque of $\text{NGN } 2,100$ previously deposited and entered in the Cash Book was returned unpaid (dishonoured) by the bank

What is the adjusted Cash Book balance in $\text{NGN}$ ? (Express an overdrawn balance as a negative number, e.g., $-5000$ ).

Show answer & explanation

Answer: -15550

Answer

The adjusted Cash Book balance is an overdraft of

-\text{NGN } 15,550

.

To calculate the adjusted Cash Book balance, start with the unadjusted overdraft of

-\text{NGN } 14,800

. Add unrecorded receipts such as the direct credit of

\text{NGN } 3,400

. Deduct unrecorded payments and debits made by the bank, which include bank charges (

\text{NGN } 850

), standing order (

\text{NGN } 1,200

), and the dishonoured cheque (

\text{NGN } 2,100

). Unpresented cheques and uncredited lodgements are timing differences that are reconciled only in the Bank Reconciliation Statement, so they are not included in adjusting the Cash Book. Calculating

-\text{NGN } 14,800 + \text{NGN } 3,400 - \text{NGN } 850 - \text{NGN } 1,200 - \text{NGN } 2,100

gives

-\text{NGN } 15,550

.

Step-by-Step Solution

1

Identify the starting Cash Book balance

Initial balance =

-\text{NGN } 14,800

(overdraft)

An overdrawn Cash Book balance is treated as a negative cash position.

2

Add items that increase the Cash Book balance

Add Direct Credit =

+\text{NGN } 3,400

. Running total =

-\text{NGN } 11,400

Direct credits are receipts deposited straight into the bank account by third parties which must be added to the Cash Book.

3

Deduct items that reduce the Cash Book balance

Deduct Bank Charges (

-\text{NGN } 850

), Standing Order (

-\text{NGN } 1,200

), and Dishonoured Cheque (

-\text{NGN } 2,100

). Total deductions =

-\text{NGN } 4,150

Bank charges, standing orders, and dishonoured cheques represent payments or uncollectible deposits recorded by the bank that must be debited/subtracted in the Cash Book.

4

Filter out items that do not belong in the Adjusted Cash Book

Unpresented cheques (

\text{NGN } 6,200

) and uncredited lodgements (

\text{NGN } 4,500

) are excluded from the Cash Book adjustment.

Unpresented cheques and uncredited lodgements are timing differences already correctly entered in the Cash Book, so they are adjusted in the Bank Reconciliation Statement rather than the Cash Book.

5

Calculate the final adjusted balance

Adjusted Cash Book balance =

-\text{NGN } 11,400 - \text{NGN } 4,150 = -\text{NGN } 15,550

Combining the initial overdraft with net adjustments gives the corrected balance.

Key Concept

Distinction between Cash Book adjustments (omitted items, errors, bank charges, direct debits) and Bank Reconciliation Statement items (timing differences like unpresented cheques and uncredited lodgements).

Question 9Question →

Match each bank reconciliation item on the left to its correct accounting treatment on the right when preparing an Adjusted Cash Book.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Customer's direct transfer matches being debited to the Adjusted Cash Book to record customer payment; Unrecorded bank service charges matches being credited to the Adjusted Cash Book to record bank charges; Cheques issued but not yet presented matches being shown in the Bank Reconciliation Statement as a timing difference; Standing order payment matches being credited to the Adjusted Cash Book to record automated regular payment.

Items omitted from the cash book but processed by the bank must be entered into the Adjusted Cash Book. Direct receipts are debited, while unrecorded payments (bank charges, standing orders) are credited. Timing differences such as unpresented cheques are already in the cash book and are handled in the Bank Reconciliation Statement.

Step-by-Step Solution

1

Identify items that represent unrecorded cash receipts

Customer's direct transfer is an unrecorded receipt

Direct deposits appear on the bank statement before the cash book is updated and must be debited to the Adjusted Cash Book.

2

Identify items that represent unrecorded cash payments

Bank service charges and standing orders are unrecorded payments

These items were deducted directly by the bank and must be credited to the Adjusted Cash Book.

3

Distinguish cash book adjustments from bank reconciliation items

Unpresented cheques belong in the Bank Reconciliation Statement

Unpresented cheques have already been entered into the cash book, so they are timing differences rather than cash book omissions.

Key Concept

Classification of Bank Reconciliation Items into Adjusted Cash Book vs. Bank Reconciliation Statement

Question 10Question →

The Sales Ledger Control Account of Bisi Enterprises showed a debit balance of ₦354,200 prior to reconciliation. An audit of the books revealed the following discrepancies:

1. A sales return of ₦14,600 was recorded in the Sales Returns Day Book as ₦16,400 and posted as such to the Sales Ledger Control Account.
2. Credit sales of ₦28,500 correctly recorded in the Sales Day Book were posted to the customer's personal account as ₦52,800.
3. Discount allowed of ₦6,400 correctly entered in the Cash Book was omitted from the Sales Ledger Control Account.
4. A dishonoured cheque of ₦12,200 received from a customer was correctly recorded in the Cash Book but posted to the credit side of the Sales Ledger Control Account.
5. A set-off (contra entry) of ₦8,500 between the sales ledger and purchases ledger was correctly posted in the Purchases Ledger Control Account but omitted entirely from the Sales Ledger Control Account.

Calculate the adjusted debit balance of the Sales Ledger Control Account.

Show answer & explanation

Answer: 365500

Answer

The adjusted debit balance of the Sales Ledger Control Account is ₦365,500.

To obtain the adjusted debit balance of ₦365,500:
- Unadjusted Balance: ₦354,200 (Debit)
- Error 1 (Sales Return over-statement): Debit ₦1,800 (₦16,400 - ₦14,600)
- Error 2 (Personal Account error): ₦0 adjustment to Control Account
- Error 3 (Discount Allowed omitted): Credit ₦6,400
- Error 4 (Dishonoured Cheque on wrong side): Debit ₦24,400 (2 × ₦12,200)
- Error 5 (Contra Entry omitted): Credit ₦8,500

Net calculation: ₦354,200 + ₦1,800 - ₦6,400 + ₦24,400 - ₦8,500 = ₦365,500.

Step-by-Step Solution

1

Determine the effect of the sales return recording error.

Sales returns reduce debtors and belong on the credit side of the Sales Ledger Control Account. Since ₦16,400 was credited instead of ₦14,600, the control account was over-credited by ₦1,800. Correcting this requires a debit adjustment of ₦1,800.

Debiting the account by the difference of ₦1,800 reduces the excess credit entry.

2

Evaluate the customer personal account posting error.

No adjustment to the Sales Ledger Control Account (₦0).

Errors made in posting to individual customer accounts alter the total of the list of debtors, but do not affect the control account because control accounts are posted from totals of books of prime entry.

3

Account for omitted discount allowed.

Credit the Sales Ledger Control Account with ₦6,400.

Discount allowed reduces total trade receivables and must be posted on the credit side of the Sales Ledger Control Account.

4

Correct the dishonoured cheque posted to the wrong side of the control account.

Debit the Sales Ledger Control Account with ₦24,400.

Dishonoured cheques reinstate debt and should be debited to the control account. Posting ₦12,200 to the credit side created a ₦12,200 deficit; hence a debit entry of twice the amount (2 × ₦12,200 = ₦24,400) is required to reverse the credit and apply the debit.

5

Post the omitted set-off (contra entry).

Credit the Sales Ledger Control Account with ₦8,500.

Contra entries reduce both debtors and creditors, requiring a credit entry in the Sales Ledger Control Account.

6

Calculate the final corrected balance.

₦354,200 + ₦1,800 - ₦6,400 + ₦24,400 - ₦8,500 = ₦365,500.

Summing the initial balance and all net debit and credit adjustments yields the true corrected balance.

Key Concept

Sales Ledger Control Account Error Corrections and Ledger Reconciliation

Question 11Question →

Prior to reconciliation, the Purchases Ledger Control Account of Kalu Traders showed a credit balance of $₦248,500$ on 31 December 2025. Upon auditing the accounting records, the following errors were discovered:

1. A credit purchase invoice for $₦14,200$ was completely omitted from the Purchases Journal.
2. Returns outwards of $₦6,800$ were posted to the credit side of the Purchases Ledger Control Account instead of the debit side.
3. Discount received amounting to $₦3,500$ was recorded correctly in the cash book but omitted from the control account.
4. The total of the Purchases Day Book was overcast by $₦5,000$ .

What is the correct adjusted balance of the Purchases Ledger Control Account?

Show answer & explanation

Answer: 240600

Answer

The adjusted balance of the Purchases Ledger Control Account is ₦240,600.

To calculate the adjusted credit balance of the Purchases Ledger Control Account, start with the unadjusted figure of

₦248,500

. Add

₦14,200

for omitted credit purchases. Subtract

₦13,600

to correct returns outwards wrongly credited (

2 \times ₦6,800

). Subtract

₦3,500

for omitted discount received and

₦5,000

for the overcast purchases day book. The resulting corrected credit balance is

₦240,600

.

Step-by-Step Solution

1

Identify the unadjusted credit balance

Unadjusted credit balance = ₦248,500

This serves as the starting figure prior to adjustments.

2

Adjust for omitted purchase invoice

Credit Purchases Ledger Control Account by ₦14,200

Credit purchases increase creditors, so omitting the invoice requires a credit entry.

3

Correct returns outwards wrongly credited

Debit Purchases Ledger Control Account by ₦13,600

Posting returns outwards to the credit side requires debiting double the amount (₦6,800 to reverse wrong credit + ₦6,800 to post correct debit).

4

Adjust for omitted discount received and overcast day book total

Debit control account by ₦3,500 and ₦5,000 respectively

Discount received reduces total liability to creditors. Overcasting the day book resulted in an excessive credit entry that must be reduced with a debit.

5

Compute final adjusted credit balance

Adjusted balance = ₦240,600

₦248,500 + ₦14,200 - ₦13,600 - ₦3,500 - ₦5,000 = ₦240,600.

Key Concept

Purchases Ledger Control Account Error Correction

Question 12Question →

Match each accounting transaction item on the left with its correct entry placement in the Purchases Ledger Control Account on the right.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Discount received and Returns outwards are debited to the Purchases Ledger Control Account because they reduce liability to suppliers, while Credit purchases and Interest charged by suppliers are credited because they increase liability to suppliers.

The Purchases Ledger Control Account acts as a total creditors account. Any transaction that reduces the debt owed to trade creditors (such as discount received, cash/cheque payments, and returns outwards) is entered on the debit side. Any transaction that increases the debt owed (such as credit purchases, interest charged by suppliers on overdue accounts, and refund/dishonoured cheques) is entered on the credit side.

Step-by-Step Solution

1

Determine the nature of the Purchases Ledger Control Account.

The Purchases Ledger Control Account is a liability summary account carrying a normal credit balance.

It represents total amounts owed to trade creditors (suppliers).

2

Classify transactions that decrease the liability owed to creditors.

Discount received and Returns outwards are classified as debit entries.

Reductions in liability accounts are debited.

3

Classify transactions that increase the liability owed to creditors.

Credit purchases and Interest charged by suppliers are classified as credit entries.

Increases in liability accounts are credited.

Key Concept

Posting rules for Purchases Ledger Control Account

Question 13Question →

The adjusted cash book of Kalu Traders shows a debit (favourable) balance of $\text{NGN } 25,000$ . Unpresented cheques total $\text{NGN } 4,000$ , while uncredited lodgements amount to $\text{NGN } 3,000$ . What is the balance as per the bank statement?

\text{NGN } 26,000

\text{NGN } 24,000

\text{NGN } 18,000

\text{NGN } 32,000

Show answer & explanation

Answer: \text{NGN } 26,000

Answer

The balance as per the bank statement is

\text{NGN } 26,000

.

To reconcile from an adjusted cash book debit balance to the bank statement balance, unpresented cheques are added because the bank has not yet deducted these payments, while uncredited lodgements are subtracted because the bank has not yet credited these deposits. Computing

\text{NGN } 25,000 + \text{NGN } 4,000 - \text{NGN } 3,000

gives

\text{NGN } 26,000

.

Step-by-Step Solution

1

Identify the starting balance and reconciling items

Adjusted Cash Book Balance =

\text{NGN } 25,000

; Unpresented Cheques =

\text{NGN } 4,000

; Uncredited Lodgements =

\text{NGN } 3,000

.

These items represent timing differences between the Cash Book and the Bank Statement.

2

Add unpresented cheques to the cash book balance

\text{NGN } 25,000 + \text{NGN } 4,000 = \text{NGN } 29,000

.

Unpresented cheques have been credited in the cash book but not yet debited by the bank, so they increase the bank statement balance relative to the cash book.

3

Deduct uncredited lodgements from the total

\text{NGN } 29,000 - \text{NGN } 3,000 = \text{NGN } 26,000

.

Uncredited lodgements have been debited in the cash book but not yet credited by the bank, so they must be subtracted when reconciling from the cash book to the bank statement.

Key Concept

Reconciliation of Adjusted Cash Book Balance to Bank Statement Balance

Estimated Time:45s

Question 14Question →

The following information was extracted from the accounting records of Kalu & Sons for the year ended 31 December 2025:

- Opening balances at 1 January 2025: Debit balance $₦45,000$ , Credit balance $₦1,200$
- Total sales (including cash sales of $₦70,000$ ): $₦320,000$
- Cash and cheques received from customers: $₦210,000$
- Discount allowed to customers: $₦4,500$
- Cheques received from customers dishonoured: $₦3,800$
- Bad debts written off: $₦2,200$
- Provision for doubtful debts: $₦5,000$
- Cash refunded to a customer for overpayment: $₦1,500$
- Set-off against balance in purchases ledger: $₦6,000$
- Closing credit balance at 31 December 2025: $₦800$

What is the closing debit balance of the Sales Ledger Control Account at 31 December 2025?

₦77,200

₦72,200

₦86,200

₦147,200

Show answer & explanation

Answer: ₦77,200

Answer

₦77,200

The closing debit balance of ₦77,200 is derived by correctly identifying debit items (Opening Debit Balance of ₦45,000, Credit Sales of ₦250,000, Dishonoured Cheques of ₦3,800, Cash Refund of ₦1,500, and Closing Credit Balance of ₦800) and subtracting credit items (Opening Credit Balance of ₦1,200, Cash/Cheques Received of ₦210,000, Discount Allowed of ₦4,500, Bad Debts Written Off of ₦2,200, and Purchases Ledger Set-off of ₦6,000). Provision for doubtful debts is intentionally excluded as it does not form part of control accounts.

Step-by-Step Solution

1

Calculate credit sales for the period

Credit Sales = Total Sales - Cash Sales =

₦320,000 - ₦70,000 = ₦250,000

Only credit sales increase trade receivables; cash sales do not enter the sales ledger control account.

2

Sum all debit entries in the Sales Ledger Control Account

Total Debits = Opening Debit Balance (

₦45,000

) + Credit Sales (

₦250,000

) + Dishonoured Cheques (

₦3,800

) + Cash Refund to Customer (

₦1,500

) + Closing Credit Balance (

₦800

) =

₦301,100

Debit entries represent items that increase the receivables balance or represent closing credit balances.

3

Sum all credit entries in the Sales Ledger Control Account

Total Credits = Opening Credit Balance (

₦1,200

) + Cash/Cheques Received (

₦210,000

) + Discount Allowed (

₦4,500

) + Bad Debts Written Off (

₦2,200

) + Set-off/Contra (

₦6,000

) =

₦223,900

Credit entries represent items that decrease the receivables balance or represent opening credit balances. Note that provision for doubtful debts is excluded.

4

Deduct total credits from total debits to obtain the closing debit balance

Closing Debit Balance =

₦301,100 - ₦223,900 = ₦77,200

The difference between total debits and total credits gives the net closing debit balance.

Key Concept

Sales Ledger Control Account Balance Calculation

Estimated Time:2m 0s

Question 15Question →

Prior to ledger reconciliation, the Sales Ledger Control Account of Tari Traders showed a debit balance of $₦482,000$ on 31 December 2025. An audit of the books revealed the following errors:

1. A sales invoice of $₦18,400$ issued to a customer was completely omitted from the sales journal.
2. A cash refund of $₦5,200$ made to a debtor was mistakenly credited to the Sales Ledger Control Account.
3. The total of the sales returns journal was overcast by $₦3,500$ .
4. Discount allowed totaling $₦2,800$ had been posted to the debit side of the Sales Ledger Control Account instead of the credit side.

What is the adjusted balance of the Sales Ledger Control Account?

₦508,700

₦506,300

₦519,900

₦492,100

Show answer & explanation

Answer: ₦508,700

Answer

The adjusted balance of the Sales Ledger Control Account is ₦508,700.

The correct adjusted balance of ₦508,700 is derived by systematically applying double-entry control account principles to each error: adding ₦18,400 for the unrecorded invoice, adding ₦10,400 to reverse and correctly debit the cash refund, adding ₦3,500 to correct overcredited sales returns, and deducting ₦5,600 to remove the erroneous debit and apply the credit for discount allowed.

Step-by-Step Solution

1

Identify the unadjusted starting debit balance

Unadjusted Debit Balance =

₦482,000

This is the initial ledger control balance prior to adjusting for discovered errors.

2

Adjust for omitted sales invoice

Add Debit of

₦18,400

An omitted sales invoice means total sales posted to the control account was understated, requiring a debit entry to increase the control balance.

3

Correct cash refund credited in error

Add Debit of

₦10,400

(

₦5,200 \times 2

)

A cash refund to a customer increases the debtor balance (debit). Crediting it by mistake requires a debit of twice the amount—once to cancel the wrong credit and once to record the correct debit.

4

Correct overcast sales returns journal

Add Debit of

₦3,500

Sales returns reduce debtors (credited to control account). Because the returns journal total was overcast, too much was credited, so debiting

₦3,500

restores the correct balance.

5

Correct discount allowed wrongly debited

Subtract Credit of

₦5,600

(

₦2,800 \times 2

)

Discount allowed reduces debtors and belongs on the credit side of the control account. Posting it to the debit side requires a credit entry of twice the amount (

₦5,600

) to rectify.

6

Compute the final adjusted debit balance

Adjusted Balance =

₦482,000 + ₦18,400 + ₦10,400 + ₦3,500 - ₦5,600 = ₦508,700

Summing all corrective debit and credit entries yields the accurate adjusted Sales Ledger Control Account balance.

Key Concept

Control Account Error Correction and Wrong-Side Adjustment Rules

Question 16Question →

An accountant extracted the following ledger summary for the trading period of Chukwu Enterprises:

- Debtors balance (1 Jan): Debit balance $\text{₦}12,500$ , Credit balance $\text{₦}400$
- Credit sales: $\text{₦}55,000$
- Cash and cheques received from debtors: $\text{₦}48,200$
- Returns inwards: $\text{₦}1,600$
- Discount allowed: $\text{₦}950$
- Dishonoured cheques from customer accounts: $\text{₦}1,200$
- Bad debts written off: $\text{₦}800$
- Provision for doubtful debts: $\text{₦}500$
- Set-off contra entry with Purchases Ledger: $\text{₦}1,100$
- Cash refunds to credit customers: $\text{₦}350$
- Debtors credit balance (31 Dec): $\text{₦}250$

What is the closing debit balance of the Sales Ledger Control Account at 31 December?

₦16,250

₦15,750

₦13,850

₦18,150

Show answer & explanation

Answer: ₦16,250

Answer

The closing debit balance of the Sales Ledger Control Account is ₦16,250.

The correct closing debit balance is ₦16,250. Summing all debit side postings gives ₦12,500 (opening Dr) + ₦55,000 (credit sales) + ₦1,200 (dishonoured cheques) + ₦350 (cash refunds) + ₦250 (closing Cr balance) = ₦69,300. Subtracting the credit side postings of ₦400 (opening Cr balance) + ₦48,200 (cash received) + ₦1,600 (returns inwards) + ₦950 (discount allowed) + ₦800 (bad debts) + ₦1,100 (contra set-off) = ₦53,050 leaves a closing debit balance of ₦16,250. Provision for doubtful debts is correctly ignored.

Step-by-Step Solution

1

Identify items to be posted to the Debit side of the Sales Ledger Control Account

Debit items: Opening Debit Balance (

\text{₦}12,500

), Credit Sales (

\text{₦}55,000

), Dishonoured Cheques (

\text{₦}1,200

), Cash Refunds to Debtors (

\text{₦}350

), and Closing Credit Balance (

\text{₦}250

). Total Debit Side =

\text{₦}69,300

.

Debit side represents increases in total amounts owed by trade debtors plus balances brought down.

2

Identify items to be posted to the Credit side of the Sales Ledger Control Account

Credit items: Opening Credit Balance (

\text{₦}400

), Cash and Cheques Received (

\text{₦}48,200

), Returns Inwards (

\text{₦}1,600

), Discount Allowed (

\text{₦}950

), Bad Debts Written Off (

\text{₦}800

), and Contra Set-off (

\text{₦}1,100

). Total Known Credit Items =

\text{₦}53,050

.

Credit side represents reductions in total amounts owed by trade debtors.

3

Exclude non-control account items

Provision for doubtful debts (

\text{₦}500

) is excluded completely from the Sales Ledger Control Account.

Provision for doubtful debts is an adjustment made in final accounts and ledger, not entered into the sales ledger control account.

4

Calculate the closing debit balance

Closing Debit Balance = Total Debit Side - Total Credit Side =

\text{₦}69,300 - \text{₦}53,050 = \text{₦}16,250

.

The balancing figure on the credit side represents the closing debit balance of trade debtors.

Key Concept

Sales Ledger Control Account preparation and item classification

Estimated Time:1m 30s

Question 17Question →

The following details were extracted from the accounting records of Zainab Trading Store for the year ended 31st December 2025:

- Opening debtors balance (1st January 2025): $\text{₦}45,000$
- Credit sales for the year: $\text{₦}185,000$
- Cash and cheque received from debtors: $\text{₦}142,000$
- Dishonoured cheques from debtors: $\text{₦}3,500$
- Discount allowed to trade debtors: $\text{₦}4,800$
- Bad debts written off: $\text{₦}2,500$
- Returns inwards: $\text{₦}6,200$
- Set-off against purchases ledger (contra entry): $\text{₦}3,000$
- Cash refunded to debtors for overpayment: $\text{₦}1,500$

What is the closing debit balance of the Sales Ledger Control Account as at 31st December 2025?

Show answer & explanation

Answer: 76500

Answer

The closing debit balance of the Sales Ledger Control Account as at 31st December 2025 is

\text{₦}76,500

.

To find the closing debit balance of the Sales Ledger Control Account, sum all debit entries (Opening Balance

\text{₦}45,000

+ Credit Sales

\text{₦}185,000

+ Dishonoured Cheques

\text{₦}3,500

+ Cash Refunds

\text{₦}1,500

=

\text{₦}235,000

) and subtract all credit entries (Cash Received

\text{₦}142,000

+ Discount Allowed

\text{₦}4,800

+ Bad Debts

\text{₦}2,500

+ Returns Inwards

\text{₦}6,200

+ Contra Entry

\text{₦}3,000

=

\text{₦}158,500

). This gives

\text{₦}235,000 - \text{₦}158,500 = \text{₦}76,500

.

Step-by-Step Solution

1

Calculate the total of the debit side entries

Total Debits =

\text{₦}45,000 + \text{₦}185,000 + \text{₦}3,500 + \text{₦}1,500 = \text{��}235,000

Opening debtors balance, credit sales, dishonoured cheques, and refunds to debtors increase the total debt owed by debtors and are placed on the debit side.

2

Calculate the total of the credit side entries

Total Credits =

\text{₦}142,000 + \text{₦}4,800 + \text{₦}2,500 + \text{₦}6,200 + \text{₦}3,000 = \text{₦}158,500

Payments received, discounts allowed, bad debts, sales returns, and set-off entries reduce the total debt owed by debtors and are placed on the credit side.

3

Subtract total credit items from total debit items to find the closing balance

Closing Debtors Balance =

\text{₦}235,000 - \text{₦}158,500 = \text{₦}76,500

The balancing figure on the credit side represents the closing debit balance brought down for the next accounting period.

Key Concept

Sales Ledger Control Account Balancing

Question 18Question →

The Purchases Ledger Control Account of Adebayo & Sons showed a credit balance of $\text{₦}186,400$ on 31 December 2025 prior to ledger reconciliation. An investigation of the accounting records revealed the following errors:

1. A credit purchase of inventory for $\text{₦}14,200$ was recorded in the Purchases Day Book as $\text{₦}12,400$ .
2. Discounts received amounting to $\text{₦}3,500$ were correctly posted to individual suppliers' accounts in the Purchases Ledger, but omitted completely from the Control Account.
3. A set-off (contra entry) of $\text{₦}6,000$ between the Sales Ledger and Purchases Ledger was credited to the Purchases Ledger Control Account in error.
4. A credit purchase of office machinery costing $\text{₦}25,000$ was incorrectly entered in the Purchases Day Book.

What is the corrected credit balance of the Purchases Ledger Control Account?

\text{₦}147,700

\text{₦}153,700

\text{₦}154,700

\text{₦}172,700

Show answer & explanation

Answer: $\text{₦}147,700$

Answer

The corrected credit balance of the Purchases Ledger Control Account is

\text{₦}147,700

.

Starting with the unadjusted credit balance of

\text{₦}186,400

, we add

\text{₦}1,800

for the understated Purchases Day Book total. Next, we deduct

\text{₦}3,500

for omitted discounts received,

\text{₦}12,000

to rectify the wrongly credited contra entry on the debit side, and

\text{₦}25,000

for the misclassified machinery purchase. This yields an adjusted credit balance of

\text{₦}147,700

.

Step-by-Step Solution

1

Adjust for the Purchases Day Book under-statement

Add

\text{₦}1,800

to the credit balance

The journal total was recorded as

\text{₦}12,400

instead of

\text{₦}14,200

, understating total credit purchases posted to the control account by

\text{₦}14,200 - \text{₦}12,400 = \text{₦}1,800

.

2

Adjust for omitted discounts received

Debit the control account by

\text{₦}3,500

(deduct from credit balance)

Discount received reduces trade payables and belongs on the debit side of the Purchases Ledger Control Account.

3

Correct the misplaced contra entry

Debit the control account by

\text{₦}12,000

(

2 \times \text{₦}6,000

)

A contra entry reduces liabilities and should be debited. Crediting it erroneously increased the balance by

\text{₦}6,000

, so a debit of

\text{₦}12,000

is needed to eliminate the wrong credit and apply the correct debit.

4

Remove capital expenditure misclassified in the Purchases Day Book

Debit the control account by

\text{₦}25,000

(deduct from credit balance)

Purchases of non-current assets (machinery) belong in the General Journal, not the Purchases Day Book. Including it overstated total credit purchases credited to the control account by

\text{₦}25,000

.

5

Calculate the final adjusted credit balance

\text{₦}186,400 + \text{₦}1,800 - \text{₦}3,500 - \text{₦}12,000 - \text{₦}25,000 = \text{₦}147,700

Summing unadjusted balance and net additions/deductions yields the corrected control account balance.

Key Concept

Control Account Error Corrections

Estimated Time:2m 30s

Question 19Question →

The following transaction balances were extracted from the books of Alabi & Sons for the year ended 31st December 2025:

Transaction Details	Amount (₦)
Opening balance of creditors (1st Jan 2025)	45,000
Payments to creditors by cash and cheque	250,000
Discount received	12,000
Returns outwards	8,500
Returns inwards	6,000
Cash purchases	35,000
Closing balance of creditors (31st Dec 2025)	52,000

What is the total credit purchases for the year?

₦277,500

₦253,500

₦283,500

₦312,500

Show answer & explanation

Answer: ₦277,500

Answer

₦277,500

The correct figure of ₦277,500 is calculated by totaling the debit side of the Purchases Ledger Control Account (payments of ₦250,000 + discount received of ₦12,000 + returns outwards of ₦8,500 + closing balance of ₦52,000 = ₦322,500) and subtracting the opening balance of ₦45,000.

Step-by-Step Solution

1

Filter relevant items for the Purchases Ledger Control Account

Relevant items are opening balance (credit ₦45,000), payments (debit ₦250,000), discount received (debit ₦12,000), returns outwards (debit ₦8,500), and closing balance (debit ₦52,000). Returns inwards and cash purchases are excluded.

Returns inwards belong to the sales ledger control account, and cash purchases do not affect individual creditors' ledger accounts.

2

Sum all debit side entries including the closing balance

Total debit entries = ₦250,000 + ₦12,000 + ₦8,500 + ₦52,000 = ₦322,500

Items reducing creditors and the balance carried down are placed on the debit side of the control account.

3

Deduct opening balance from total debit side to find credit purchases

Credit Purchases = ₦322,500 - ₦45,000 = ₦277,500

The Purchases Ledger Control Account total on the debit side must equal the total on the credit side.

Key Concept

Purchases Ledger Control Account Balancing and Item Selection

Estimated Time:1m 30s

Question 20Question →

Match each accounting transaction on the left with its corresponding entry placement and accounting effect in the Purchases Ledger Control Account on the right.

Click a left item, then click its matching right item

Show answer & explanation

Answer

Discount received corresponds to debiting the control account to reduce supplier liability; Credit purchases correspond to crediting the control account as the primary increase in accounts payable; Interest charged by suppliers corresponds to crediting the control account as an additional liability charge; Set-off (contra entry) corresponds to debiting the control account to adjust for mutual balances.

Transactions that increase liabilities owed to suppliers (such as credit purchases and overdue interest charged) are credited to the Purchases Ledger Control Account. Conversely, transactions that decrease liabilities owed to suppliers (such as discount received and set-off contra entries) are debited to the control account.

Step-by-Step Solution

1

Identify transactions that increase trade creditors' liability.

Credit purchases and interest charged by suppliers increase the liability.

Purchases Ledger Control Account acts as a total creditors account, where increases in liabilities are credited.

2

Identify transactions that decrease trade creditors' liability.

Discount received and set-offs (contra entries) decrease the liability.

Decreases in creditors' balances must be debited to the control account.

3

Match each transaction to its exact placement rationale.

Left 1 maps to Right 1, Left 2 maps to Right 2, Left 3 maps to Right 3, and Left 4 maps to Right 4.

Matches align strictly with the principles of double entry control accounting.

Key Concept

Purchases Ledger Control Account Debit and Credit Posting Rules

Estimated Time:1m 30s

Control Accounts and Bank Reconciliation

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