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SSC Financial and Cost Accounting P-1 QUESTION #6080
Question 1

Identify the statement that is not correct regarding accounting ledgers and accounts:

  • Control accounts help identify errors within the sales and purchases ledgers.
  • Any credit balances remaining in a sales ledger are categorized as trade receivables.✔️
  • Debit balances found in a purchases ledger are treated as current assets.
  • Irrecoverable debts are included in the sales ledger control account.
Correct Answer Explanation

Statement B is incorrect because a credit balance in the sales ledger (usually due to overpayment or returns) represents a trade payable (liability), not a receivable. Debit balances in the purchases ledger are current assets (Statement C) and Statement D is correct as write-offs are recorded in the control account.