Skip to content

ACCA Applied Knowledge · Financial Accounting · Receivables and payables

At 1 January, the receivables ledger control account of Marlow Co had a debit balance of $48,000. During the month: credit sales were $126,000; cash received from customers was $112,500; discounts allowed were $2,300; sales returns were $4,200; and a receivables balance of $1,800 was written off as irrecoverable. What is the closing balance on the control account at 31 January?

The closing balance is $53,200. Start with opening receivables of $48,000, add credit sales of $126,000, then deduct cash received, discounts allowed, sales returns and the irrecoverable debt written off, which total $120,800 in all.

  1. A$53,200Correct
  2. B$55,000
  3. C$57,000
  4. D$51,400

Explanation

Opening balance 48,000 + credit sales 126,000 = 174,000. Deduct cash 112,500, discounts allowed 2,300, returns 4,200 and bad debt written off 1,800 = 120,800 in total. 174,000 - 120,800 = 53,200. Option $55,000 results from omitting the write-off, which is wrong because the write-off removes the balance from receivables.

Did you get it right without looking?

One question tells you little. A timed set on Receivables and payables shows your real accuracy, how long you take and where you lose marks.

Practise Receivables and payablesFree diagnostic mock

More Receivables and payables questions