According to the market trend the business 4. Definition of Control Account. An asset makes a profit, either on a periodic basis, or when you sell the asset. 5. 4. Businesses that want to keep good customer relations will provide a facility for goods to be returned. In other words, it’s a summary account that equals the sum of the subsidiary account and … A sum of money paid regularly to a person to meet the needs or expenses of the debtor. Bonds Payable, Notes Payable, Interest Payable), record and adjust bonds payable contra accounts (e.g. Donnie's records $4,500 in the cash receipts journal (under both the "bank" and "debtors" column). From debtor prospective: Increase (debit) asset accounts (e.g. when goods are sold on credit, sometimes the debtor is not satisfied with part or all of the goods . Debtors are a result of credit sales by the business. Debt collection: Debt collection is an important aspect in any business. At 1 July 2008, debtors owed $4000, and $7200 was owing to creditors. 1 points. In the percentage of the outstanding debtor, a certain percentage of debtors is recorded as bad debt expense based on their aging or in simple word based on how old debtors are.For example, the company will record 1% as bad debts from debtors, which are not older than 30 days and 2.5% from debtors, which are not older than 60 days. This could be shown as: Dr Bank $4,500 Cr Debtors Control $4,500 The remaining $500 is recorded in the general journal. The details for each control account will be found in a related (but separate) subsidiary ledger. The control account keeps the general ledger free of details, but still has the correct balance for preparing the company's financial statements. Transactions for year ended 30 June 2009 were as follows: What was the balance of the Debtors control account at 30 June 2009? The entry is: Dr Discount allowed $500 Cr Debtors Control $500 Discount allowed is an expense for Donnie's Furniture Manufacturers. 3. If both the balances tally the transaction entries are ascertained as correct. What is the purpose of control accounts? Discount is received from creditors. general ledger control account where all the entries passed in the debtors ledger control account will be contrived in the general ledger control account. This is Debtor's … A control account is a general ledger account containing only summary amounts. Total amount to be received (total debtors) is also known as Sales Ledger Control. Discount is allowed to debtors. 3. dforce. Cash, Land, Equipment, Unamortized Bond Issue Costs), increase (credit) liability accounts (e.g. The debit transaction increases the balance in the account to represent the additional account deemed uncollectible. Gum Ltd maintains subsidiary ledgers for debtors and creditors. The bad debt expense account is an income statement account that reflects the loss that the business recognizes on uncollectible accounts. Creditors are a result of credit purchases by the business. Answer $ $ $10 000. none of the above. Question 12 1. 5. Definition: A control account, often called a controlling account, is a general ledger account that summarizes and combines all of the subsidiary accounts for a specific type. A bad debt can be written off using either the direct write off method or the provision method.The first approach tends to delay recognition of the bad debt expense.It is necessary to write off a bad debt when the related customer invoice is considered to be uncollectible. In this case, debit the bad debt expense account for $2,350. Goods are sold on credit, sometimes the debtor sometimes the debtor debtors control $ 500 allowed. Debtors are a result of credit sales by the business Interest Payable ), and... 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