Credit side items decrease trade receivables in sales ledger control account

Steps:

• Sales ledger control account credits reflect reductions in debtors balance from adjustments like write-offs and returns.
• Irrecoverable debts written off credits debtors to remove bad debts.
• Cash refunds credit debtors when returning overpayments or for credit sales adjustments.
• Discounts allowed credit debtors for trade concessions.
• Sales returns credit debtors for goods returned by customers.

Why C is correct:

• Irrecoverable debts written off, cash refunds, discounts allowed, and sales returns all decrease receivables via credit entries, aligning with double-entry rules for the control account.

Why the others are wrong:

• A: Sales is a debit entry increasing receivables.
• B: Cash received is a credit but grouped with items not exclusively credit-side in standard format.
• D: Sales is a debit entry increasing receivables.

Final answer: C