From the following particulars, construct a sales ledger adjustment account as it will appear in the nominal ledger of a business:
Balances on 30.6.22 (Dr.): 65,290
Balances on 30.6.22 (Cr.): 250
Sales as per sales day book: 120,500
Sales as per cash book: 10,000
Purchases as per purchase day book: 75,300
Purchases as per cash book: 5,000
Cash received from debtors as per cash book: 89,730
Bills receivable as per bill book: 20,500
Bills receivable dishonoured as per bill book: 3,500
Bills receivable discounted as per bill book: 7,800
Returns as per returns inward day book: 5,700
Discounts allowed as per cash book: 4,200
Trade discount allowed: 300
Credit balance on 31.12.22: 340
Answer (2)
To construct a sales ledger adjustment account as it will appear in the nominal ledger of a business, we need to incorporate all the given transactions. Let's break this down step-by-step:
Balance on 30.6.22 (Dr.) : The opening balance on the debit side is £ 65 , 290 .
Balance on 30.6.22 (Cr.) : The opening balance on the credit side is £ 250 .
Sales as per sales day book : £ 120 , 500 are recorded as sales revenue.
Sales as per cash book : This amount, £ 10 , 000 , indicates cash sales made already counted in cash receipts.
Cash received from debtors : This £ 89 , 730 needs to be credited as it reduces the amount owed by debtors.
Bills receivable : £ 20 , 500 is recorded which are amounts expected from debtors and should be debited.
Bills receivable dishonoured : £ 3 , 500 should be debited as these represent bills that weren't honored by the debtors.
Bills receivable discounted : This £ 7 , 800 amount had already been accounted for as cash.
Returns as per returns inward day book : £ 5 , 700 represents sales returns, reducing debtor balances and are credited.
Discounts allowed as per cash book : £ 4 , 200 represent cash discounts allowed to debtors and are credited.
Trade discount allowed : £ 300 written off at the point of sale and not separately accounted on the sales ledger.
Credit balance on 31.12.22 : This represents the closing balance, of £ 340 on the credit side.
Now, let's construct the sales ledger adjustment account:
Date 30.6.22 30.6.22 30.6.22 30.6.22 30.6.22 30.6.22 31.12.22 Particulars Balance b/d (Dr.) Sales (Sales Day Book) Bills Receivable Total Cash Received Returns (Inward Day Book) Discount Allowed Balance c/d (Cr.) Total Amount ( £ ) 65 , 290 120 , 500 20 , 500 89 , 730 5 , 700 4 , 200 340
To ensure our ledger balances, calculate total debits and credits to verify accuracy. If discrepancies occur, double-check transaction dates and entries for any oversight.
The sales ledger adjustment account consolidates various financial transactions, including opening balances, sales, cash received, and amounts due. It organizes these transactions into debits and credits, allowing for accurate financial analysis. The resulting ledger will reflect the total amounts owed to and from debtors at the closing date.
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