25 questions foundAn aged receivables analysis groups customer balances by how long they've been outstanding (current, 30, 60, 90+ days). Produced from the sales ledger, it highlights overdue accounts for collection, informs credit decisions and bad-debt provisions, and helps manage cash flow.
Aged debtors:
Current 4,000 | 31-60: 1,500 | 61-90: 600 | 90+: 400
Real-world example The bookkeeper reviews the aged debtors report to chase the oldest balances first.
Common follow-ups: How does aging aid collections? | What informs a bad-debt provision?
Control Accounts Cash Book & Petty Cash Sales & Purchase Ledgers
They are memorandum because they hold the detail of individual customer/supplier balances but are not themselves part of the double-entry system—the double entry is captured in the control accounts in the nominal ledger. The subsidiary ledgers provide the who-owes-what breakdown supporting the single control-account total.
Real-world example The sales ledger lists each debtor, but the double entry sits in the receivables control account.
Common follow-ups: Where does the double entry actually sit? | What do subsidiary ledgers provide?
Control Accounts Trial Balance Sales & Purchase Ledgers
Total all individual customer balances in the sales ledger (a list of balances) and compare to the sales ledger control account balance in the nominal ledger. Investigate differences—posting errors, omitted entries, casting errors, or a transaction in one but not the other—and correct them so the list agrees with the control account.
List of debtors balances total: 6,500
SLCA balance: 6,650
Difference 150 -> find and correct (e.g., an omitted credit note).
Real-world example A month-end reconciliation of the debtors list to the control account uncovers an unposted receipt.
Common follow-ups: What causes list-vs-control differences? | Which figure is used in the accounts?
Control Accounts Correcting Errors Sales & Purchase Ledgers
A refund to a customer (e.g., for an overpayment or returned goods already paid) is recorded by crediting the bank (payment out) and debiting the customer's account (reducing the credit balance/receivable). A refund received from a supplier debits the bank and credits the supplier's account. Both flow through the cash book and the relevant ledger.
Refund customer 100 overpayment:
Dr Customer (sales ledger) 100
Cr Bank 100
Real-world example A customer who overpaid is refunded, reducing their credit balance and the bank.
Common follow-ups: Which account is debited for a customer refund? | How is a supplier refund recorded?
Cash Book & Petty Cash Control Accounts Sales & Purchase Ledgers
The sales ledger is updated from the sales day book (invoices), sales returns day book (credit notes), and the cash book (receipts and discounts allowed). The purchases ledger is updated from the purchases day book (invoices), purchases returns day book (credit notes), and the cash book (payments and discounts received).
Real-world example Invoices, credit notes, and cash book receipts together keep each customer's sales ledger account up to date.
Common follow-ups: Which day books feed the purchases ledger? | Where do discounts come from?
Books of Prime Entry Cash Book & Petty Cash Sales & Purchase Ledgers
Compare the supplier's statement (their record of what you owe) to your supplier account in the purchases ledger. Identify timing differences (invoices/payments in transit), missing invoices or credit notes, and errors. Adjust your records for genuine omissions and query the supplier for discrepancies, so the account agrees before payment.
Supplier statement 2,000 vs our ledger 1,700:
+200 invoice not yet entered, +100 payment they haven't recorded.
Real-world example Before paying, the bookkeeper reconciles the supplier's statement to the ledger and posts a missing invoice.
Common follow-ups: What causes statement differences? | Why reconcile before paying?
Control Accounts Correcting Errors Sales & Purchase Ledgers
Accounts receivable (trade debtors) is money owed to the business by credit customers—an asset in the sales ledger. Accounts payable (trade creditors) is money the business owes to credit suppliers—a liability in the purchases ledger. They arise from buying and selling on credit.
Real-world example Unpaid customer invoices are receivables; unpaid supplier invoices are payables.
Common follow-ups: Which is an asset? | Where is each recorded?
Control Accounts Trial Balance Sales & Purchase Ledgers
When the business pays a supplier early and takes a discount, debit the supplier's account with the payment and the discount received, and credit bank with the cash and discounts received with the discount. The discount received is income, reducing the effective cost of purchases.
Owe 600, pay 588 + 12 discount: Dr Supplier 600; Cr Bank 588; Cr Discounts Received 12.
Real-world example Paying a supplier within terms earns a discount received, credited as income when taken.
Common follow-ups: Is discount received income or expense? | Which account is credited for the discount?
Cash Book & Petty Cash Control Accounts Sales & Purchase Ledgers
When the owner takes goods for personal use, remove them from purchases/inventory and charge to drawings: debit drawings and credit purchases (at cost). No sale is recorded. This keeps business costs accurate and reflects the owner's withdrawal.
Owner takes goods costing 150: Dr Drawings 150; Cr Purchases 150.
Real-world example The owner taking stock home is recorded as drawings at cost, not as a sale.
Common follow-ups: Is this recorded as a sale? | At what value are the goods removed?
Books of Prime Entry Cash Book & Petty Cash Sales & Purchase Ledgers
A credit customer buys goods/services and pays later, creating a receivable recorded in the sales ledger via an invoice. A cash customer pays at the point of sale, recorded directly in the cash book with no ledger account needed. Only credit sales appear in the sales day book and sales ledger.
Real-world example An account customer is invoiced and tracked in the sales ledger; a walk-in pays cash recorded in the cash book.
Common follow-ups: Which customer appears in the sales ledger? | Where is a cash sale recorded?
Cash Book & Petty Cash Books of Prime Entry Sales & Purchase Ledgers