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ACCA Applied Knowledge · Financial Accounting · Sales and purchases

Dowd Co's sales ledger control account opened with a debit balance of $30,000 and closed with a debit balance of $34,000. During the period, cash received from customers was $210,000, sales returns were $6,000, and irrecoverable debts written off were $2,000. A customer's cheque for $3,000 was dishonoured and is included in the period's entries. What were credit sales for the period?

Credit sales were $219,000. The dishonoured cheque is a debit to receivables, while cash, returns and write-offs total $218,000 of credits. Solving 30,000 plus sales plus 3,000 less 218,000 equals 34,000 gives sales of $219,000.

  1. A$225,000Correct
  2. B$219,000
  3. C$222,000
  4. D$228,000

Explanation

Debits: 30,000 + sales + 3,000 dishonoured cheque. Credits: 210,000 + 6,000 + 2,000 = 218,000. Closing 34,000, so 30,000 + S + 3,000 - 218,000 = 34,000, giving S = 219,000. Option $225,000 ignores... check: S = 219,000.

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