Maurice Deleon operates an Electrical Supplies business. He has a large number of debtors and creditors and maintains both Debtors and Creditors Control accounts. The following information was taken from his books in July 2001 and represents totals for the month ending July 31, 2001.

	$
Returns Outwards	900
Discount received	2610
Cheques paid to suppliers	52500
Purchases journal	47250
Cheques from customers dishonoured	2100
Returns Inwards	1500
Discount Allowed	750
Bad Debt written off	1125
Amounts received from customers	21300
Credit sales to customers	30150
July 1 2001 balances were
Purchases Ledger debit balance	2775
Purchases Ledger credit balance	37500
Sales Ledger debit balance	9150
Sales Ledger credit balance	450

Required

(a) Prepare Maurice Deleon’s Debtors Control Account and Creditors Control Account for July 2001.

(b) Give TWO advantages of maintaining Control Account.

(c) George Mota is a customer who owes $1500. If, because of misfortune, he is only able to pay 60% of the amount to Maurice Deleon, what effect would this have on the Control Account.

Answer rating: 100% (QA)

Answer a i Debtors control account Balance cd 16275 ii Creditors control account Bala... View the full answer