Posting Items to Sales Ledger Control

Tnanzz
Tnanzz Registered Posts: 2
Hi. I have come across a question in the Green Light tests, and would be grateful for some clarification on the answer please. There is an item listed in the sales ledger control account - 'amounts refunded in cash to credit customers'. I indicated this would be a credit in the control account, but the correct answer apparently is a debit. This doesn't make sense to me as I would expect a refund to a customer would reduce my cash asset? The full question is attached. Help please?

Thanks


Best Answer

Answers

  • Tnanzz
    Tnanzz Registered Posts: 2
    Thanks EM12345. In other words the refund is treated as an expense, hence entered as a debit.
  • EM12345
    EM12345 Registered Posts: 12
    Exactly Tnanzz. Good luck with the exam. I found the green light tests really help with revision.
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