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SSC Financial and Cost Accounting P-1 QUESTION #6139
Question 1

A sales ledger control account included: (1) Contra with purchases ledger: $500 debit; (2) Discount allowed: $600 debit; (3) Irrecoverable debts written off: $1,200 debit. Which entries must be corrected?

  • 1, 2 and 3✔️
  • 1 and 2 only
  • 1 and 3 only
  • 2 and 3 only
Correct Answer Explanation

Option A (all three) is correct.

  • Contra entry should be a credit (reduces receivables), not debit.
  • Discount allowed should be a credit (reduces amount owed by customers), not debit.
  • Irrecoverable debts written off should be a credit (reduces receivable), not debit.