Which of the following is an item in the debit side of the sales ledger control account?
Interest charged by suppliers
Bills receivable honored
Transfer of credit balances from credit control account
Transfer of debit balance from creditors control account
Correct answer is A
Recall sales ledger control account are used to track trade debtors, that is goods sold on credit. We already know that we debit all income and credit expenses. The debit side of the account contains interest charged by suppliers because the goods were sold on credit and its considered an income.
Which of the following is a debit item in the purchases ledger control account?
Balance b/d
Cheque dishonoured
Purchases
Balance c/d
Correct answer is D
No explanation has been provided for this answer.
Apart from the common control accounts, a control account can also be opened for?
Sales account
Purchases account
Cash account
Wages account
Correct answer is C
No explanation has been provided for this answer.
N11,500
N17,000
N16,500
N28,500
Correct answer is C
In this method of stock valuation, the average unit cost is calculated by multiplying the total of the unit costs by the number of receiving.
| issue price method | Date | Receipt | Issue | Balance | |||||
| Simple average | Qty | price | Value | Dispatch Qty | Balance | ||||
| 1/1 | 1000 | 10 | 10000 | - | 1000 | ||||
| 2/1 | 2000 | 12 | 24000 | - | 3000 | ||||
| 3/1 | - | - | - | 1500 | 1500 | ||||
| 4/1 | 1000 | 11 | 11000 | - | 2500 | ||||
| 5/1 | - | - | - | 1000 | 1500 | ||||
| Total | 4000 | 33 | 2500 | 1500 | |||||
The closing stock using simple average =
(33 ÷ 3) x 1500 = 16500
N34,000
N29,000
N17,000
N12,000
Correct answer is C
FIFO means first in first out. This method assumes that the oldest products in a company’s inventory have been sold first. The costs paid for those oldest products are the ones used in the calculation.
| issue price method | Date | Receipt | Issue | Balance | |||||
| FIFO | Qty | price | Value | Qty | price | Value | Qty | value | |
| 1/1 | 1000 | 10 | 10000 | - | - | - | 1000 | 10000 | |
| 2/1 | 2000 | 12 | 24000 | - | - | - | 3000 | 34000 | |
| 3/1 | - | - | - | 1500 | - | 1500 | 1500 | 18000 | |
| 4/1 | 1000 | 11 | 11000 | - | - | 2500 | 2500 | 27,500 | |
| 5/1 | - | - | - | 1000 | 1500 | 1500 | 16500 |
From the table above, value of closing stock using FIFO =
Total closing stock = 1500
previous stock bought at N12 = 500 units
Last stock bought at N11 = 1000 units
12 x 500 + (11 x 1000) = 17,000