Accountancy MCQs
Topic Notes: Accountancy
General Description
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
21
When a payment of $500 is received from a debtor, which accounting entry is correct regarding the control account?
Answer:
Credit account receivable control account with $500
The Accounts Receivable Control Account represents the total amount owed by customers. When a payment is received from a debtor, the asset (receivable) decreases. Under the rules of double-entry bookkeeping, a decrease in an asset account is recorded by crediting the account.
22
Which of the following items is typically excluded from the debtor control account?
Answer:
Provision for doubtful debts
A debtor control account tracks the total balance owed by trade debtors. Items like discounts allowed, cash received, and dishonored checks directly affect the balance owed. However, the provision for doubtful debts is a valuation adjustment account and is not recorded in the control account itself, as it does not represent a specific debt owed by a customer.