ACCA Applied Knowledge · Financial Accounting · Receivables and payables
Brook Co's receivables control account at 1 January showed a debit balance of $62,000. During the year: credit sales $410,000; cash received from customers $385,000; discounts allowed $6,000; a contra with the payables ledger $4,000. What is the closing receivables balance?
The closing receivables balance is $77,000. Start with $62,000 opening balance, add $410,000 credit sales, then deduct cash received of $385,000, discounts allowed of $6,000 and the $4,000 contra entry against payables.
- A$77,000Correct
- B$81,000
- C$75,000
- D$83,000
Explanation
Opening $62,000 + credit sales $410,000 = $472,000. Deduct cash $385,000, discounts allowed $6,000 and contra $4,000 = $395,000. Closing = $77,000. Ignoring the contra and discounts gives $87,000; adding the contra instead of deducting gives $85,000... the near distractor $81,000 omits the contra only.
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