ACCA Applied Knowledge · Financial Accounting · Sales and purchases
Thorn Co's sales ledger control account at 1 July showed a balance of $42,000 debit. During July: credit sales were $60,000, cash received from customers was $51,500, settlement discounts allowed were $1,500, sales returns were $3,000 and a $2,000 balance was written off as irrecoverable. What is the closing balance at 31 July?
The closing balance is $44,000. Start with $42,000, add credit sales of $60,000, then deduct cash $51,500, discounts $1,500, returns $3,000 and the $2,000 irrecoverable debt write-off, which together total $58,000.
- A$44,000Correct
- B$46,000
- C$42,000
- D$48,000
Explanation
42,000 + 60,000 = 102,000. Deduct cash 51,500, discount 1,500, returns 3,000 and bad debt 2,000, total 58,000. 102,000 - 58,000 = 44,000. Option B omits the write-off, and option C is also wrong.
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