You are the accounts assistant in a small company called Autonomy Ltd. The company had the following transactions during June 2021: Credit sales Receipts from trade receivables Discounts allowed Sales returns Bad debts written off |Contras between sales and purchase ledgers Balance of trade receivables at 1 June 2021 26,595 23,250 650 1,525 1,650 1,000 6,950 Required: a) Construct the sales ledger control account of Autonomy Ltd from the above details. Show clearly the balance carried down at 30 June 2021. b) Explain the purpose of a sales ledger control account.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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