SUBJECT: FINANCIAL ACCOUNTING

CLASS:� SS 2

DATE:

TERM: 3rd TERM

�

WEEK FIVE

TOPIC: CONTROL ACCOUNT��

Illustration: The following balance were extracted from the books of Olotun Enterprises on 30th October, 1993 �� N

Purchase 1993�� 7,532

Purchase ledger 1/10/93�� 7,948

Sales ledger 1/10/93�� 90,454

Sales day book�� 77,530

Returns outwards�� 3,960

Returns inwards�� 14,180

Cheque received from customers�� 56,680

Cheque paid to suppliers�� 61,860

Cash overpaid to supplier �� 240�

Discount allowed�� 3,774

Discount received �� 2,678

Credit notes received �� 280

Debit notes issue�� 530�

prepare

(a) Sales ledger control account�

(b) Purchase ledger control account�

�

EVALUATION

Draw up the format of Sales Ledger Control Account with ten items.
Draw up the format of Purchases Ledger Control Account with twelve items.

�

Sales Ledger Control Account

�� N�� N

1993 Oct. Balance b/f� � �� 7,948�� 1993 Oct. Return inwards �� 14,180

��Sales �� 77,530 � Cheques received from customers 56,680

Debit notes issued�� 530� � Discount allowed �� 3,774

�� Balance c/d�� 11,374

�� 86,008�� 86,008

��Purchase Ledger Control Account �� N � � � � � � � � � � � � � � � � � � � � � N

1993 Oct.Returns Outwards � � � � � 3,960�� 1993 Oct. Balance b/f �� 7,532 �� Cheques paid to supply � � � 61,860�� Purchases �� 90,454�� Credit note received �� 280�� Cash over paid �� 240

�� Discount received�� 2,678��

Balance c/d� �� 29,448

�� 98,226�� 98,226

�

EVALUATION QUESTION

Explain what is meant by the following (a) Total debtors control account (b) Total creditors control account.
State three reasons for preparing Control Accounts.

�

READING ASSIGNMENT

Essential Financial Accounting by O.A. Longe Page 188-191

�

GENERAL EVALUATION QUESTIONS

1� � � What is a petty cash book?

2� � � Explain the imprest system as used in petty cash accounting

3� � � State four advantages of operating a petty cash system

4� � � State two reasons for separating capital expenditure from revenue

��expenditure

5� � � Explain two factors which must be considered in determining whether any

��particular item is capital or revenue expenditure��

��

WEEKEND ASSIGNMENT

Use the following information and options provided under it to answer question 1-5

Bill receivable
Bill payable�
Dishonour Cheque
Credit notes issued�
Credits notes received�

The above items are recorded under�

(a)�� General ledger control account�

(b) �� Purchase Control account�

(c)�� Proper Journal Control account�

(d)�� Sales ledger control account�

�

SECTION B

The following were extracted from Abiona enterprises on 1st January, 1980

Purchase ledger balance: Debit�� N 570

�� Credit �� N13,252

Sales ledger balance: � � � Debit�� N12,520

�� Credit �� N221

Totals for the year:�� N

Purchase Journal �� 170,198

Sales Journal �� 224,608

Return Inward�� 5,002

Return Outward Journal�� 3,123

Cheques Paid to suppliers �� 146,800

Cheques received from customers�� 189,120��

Provision for bad debts�� 7,000

Cash received from customers �� 5,000

Discount allowed �� 6,112

Discount received �� 3,300

Cash sales �� 4,500

Cash paid to suppliers �� 550

Bad debt written off �� 399

Customers cheque dishonoured�� 419

Ayo was both debtor and creditor by N725 and N550 respectively. Set this off in the account.�

Prepare:-� (a) Sale ledger control account

��(b) Purchase ledger control account�

Lesson Notes By Weeks and Term - Senior Secondary School 2