Sales Ledger Control Account Excludes Cash Transactions

Steps:

• Define sales ledger control account as a summary of credit customers' balances from the sales ledger.
• List typical entries: credit sales, receipts from credit customers, discounts allowed, and bad debt write-offs.
• Exclude cash sales, as they bypass the sales ledger and go directly to the cash book.
• Verify options against this: only cash sales do not involve credit customers.

Why A is correct:

• Cash sales represent immediate payments not involving credit customers, so they are recorded only in the cash book, per double-entry principles for cash transactions.

Why the others are wrong:

• B: Cheques from credit customers are receipts reducing debtors' balances, posted to the control account.
• C: Credit sales increase debtors' balances, directly entered from the sales journal to the control account.
• D: Irrecoverable debts reduce debtors' balances, recorded in the journal and posted to the control account.

Final answer: A