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Bookkeeping controls help


Can anyone help me with this?

I am on the chapter about using control accounts and it shows the following T account for SLCA.
Balance bd
Credit sales
Returned cheques

Payments received from customers
Discounts allowed
Sales returns
Irrecoverable debts written off
Set off/contra entries

What I am struggling with is why the payments received from customers is a CR? Surely it's money into the account so why is it CR?

Thanks for looking!



  • N4TN4T AAT Student Posts: 191
    Think what happens when you first raise an invoice.

    Ignoring VAT the double entry is: DR SLCA CR SALES
    SLCA is an ASSET (Using PEARLS is therefore a Debit - here you are increasing SLCA- amount owing from customers)

    When customer eventually pay the double entry will be; DR BANK CR SLCA

    Think which account the money is coming into...it's the bank account, hence DR BANK.
    Crediting SLCA means the total owed from receivables is reduced.

    Does this help?

  • jbouscjbousc Registered Posts: 27
    Thanks N4T! I understand now!

    Thanks to your help I passed my first exam with 92%! :3
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