IGCSE Accounting Paper-2: Specimen Questions with Answers 21 - 23 of 189

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Passage

RK Industries closes its books of accounts every year on June 30th. During the year it made purchases from various suppliers amounting to £ 640000. The books were opened with a stock of £ 890000. During the year RK Industries made payments to its creditors £ 576000. Purchases worth £ 124000 did not meet the standards required by RK industries and were hence returned back to the suppliers Discounts received during the year was £ 50000

Question 21 (1 of 5 Based on Passage)

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Essay▾

Why should RK Industries maintain control A/C՚s?

Explanation

RK Industries has a huge turnover of business, and has many suppliers and clients. In such a case it becomes difficult to open a separate account for each creditor and debtor. Hence in order to simplify the accounting process, a single ledger as the creditors or debtors ledger is maintained. All the credit purchases and sales are recorded in these ledgers respectively. In the general ledger a separate account as creditors control account and debtors control account where the total purchases and sales record is maintained.

Question 22 (2 of 5 Based on Passage)

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Essay▾

In Control acounts, the following are named as:

(i) Creditor՚s ledger: …

(ii) Debtor՚s ledger: …

Explanation

(ii) Sales Ledger Control A/C

(i) Purchase Ledger Control A/C

Question 23 (3 of 5 Based on Passage)

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Essay▾

Pass the journal entry in the books of RK Industries to record the total purchases in the creditors control A/C in the general ledger?

Explanation

Journal Entry in the Books of RK Industries
DateParticularsL. FDebit AmtCredit Amt
30-JunPurchases A/C Dr780000
To Creditor՚s control A/C780000
(Being total purchases transferred to the creditors control A/C in the general ledger)

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