ICANFinancial AccountingBank Reconciliation and Control Accounts2022

During a review of Zenith Trading Limited's receivables ledger control account for the year ended 31 December 2023, the following information was extracted: Opening balance ₦1,240,000; Credit sales ₦8,760,000; Cash received from customers ₦7,980,000; Discounts allowed ₦120,000; Irrecoverable debts written off ₦95,000; Returns inwards ₦210,000; Contras against payables ledger ₦75,000. What is the closing balance of the receivables ledger control account?

A₦1,520,000CORRECT
B₦1,595,000
C₦1,430,000
D₦1,645,000
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The closing balance is computed as: Opening balance ₦1,240,000 + Credit sales ₦8,760,000 − Cash received ₦7,980,000 − Discounts allowed ₦120,000 − Irrecoverable debts ₦95,000 − Returns inwards ₦210,000 − Contras ₦75,000 = ₦1,520,000. Each deduction reduces the amount owed by customers, and contras represent offsetting balances in the payables ledger per standard double-entry practice. The arithmetic confirms ₦10,000,000 − ₦8,480,000 = ₦1,520,000.
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