Record adjustments in the sales ledger control account
Apply less routine customer movements, including dishonoured cheques, overdue interest, contra entries and refunds.
Cambridge IGCSE Accounting 0452 / (9–1) 0985, 2027–2029 Version 1. These lessons follow the 2027–2029 syllabus only; the separate 2026 syllabus update is not yet mapped. Written practice is self-checked, not an official Cambridge grade. Full timed-paper practice and human subject-teacher review remain pending.
Before you begin
- No previous accounting study is assumed. Keep the business, transaction and accounting period in view, and distinguish a resource, a claim and a performance result.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
A business charges a customer interest for an overdue balance. What is the effect on the receivable?
What you will learn
- Record a dishonoured customer cheque and overdue-account interest
- Post contra entries and customer refunds
- Balance debit and credit movements without confusing the underlying accounts
Restore amounts that become due again
If a customer's cheque is dishonoured after the receipt reduced the debt, debit the sales ledger control account to restore the amount owed. Interest charged to an overdue customer also increases the receivable and is debited.
Use the bank evidence and the customer account reference. Do not record a dishonoured cheque as a second sale; it reverses the settlement effect, not the original sale.
Handle contra entries and refunds by tracing the direction
A contra entry offsets amounts due between the same business and the same party as customer and supplier: credit Sales Ledger Control to reduce the receivable and debit Purchases Ledger Control to reduce the payable.
A cash refund to a customer with a credit balance reduces the amount the business owes that customer: debit Sales Ledger Control and credit Bank. A normal return of goods is different: use a sales return/credit note and credit the customer's balance.
Pause and explain
A customer owes the business $300 and is also a supplier owed $210. The business offsets the amounts. What is the sales-control effect?
Worked example
The sales ledger control account has an opening debit balance of $900, credit sales $4,600, a dishonoured cheque $180 and overdue interest $20. Receipts are $3,200, returns $140, discounts $80, irrecoverable debts $60 and contra $120. Find the closing balance.
Show the worked solution
- Debits = 900 + 4,600 + 180 + 20 = $5,700.
- Credits before closing = 3,200 + 140 + 80 + 60 + 120 = $3,600.
- Closing debit = 5,700 − 3,600 = $2,100.
Answer The closing sales ledger control balance is $2,100 debit.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
A $150 customer cheque was recorded as a receipt but is dishonoured. State the control-account entry and the revised amount owed if the balance before dishonour was $480.
Give me a hint
Reverse the settlement effect without recording the sale again.
Compare my reasoning
- Debit Sales Ledger Control $150.
- Revised receivable = 480 + 150 = $630.
- The business still needs to seek settlement.
Debit Sales Ledger Control $150; the customer now owes $630.
Look for these in your work
- Entry side correct
- Revised balance correct
- Reason stated
A supplier also owes the business $270 as a customer. The business offsets $270 against a $500 receivable and a $430 payable. Give both control-account entries and the remaining balances.
Give me a hint
The offset reduces both what the customer owes and what the business owes the supplier.
Compare my reasoning
- Credit Sales Ledger Control $270: receivable becomes 500 − 270 = $230.
- Debit Purchases Ledger Control $270: payable becomes 430 − 270 = $160.
- Record the matched contra through the general journal.
Credit Sales Ledger Control $270 and debit Purchases Ledger Control $270. Remaining receivable $230; payable $160.
Look for these in your work
- Sales control reduced
- Purchases control reduced
- Both balances correct
A customer has a $75 credit balance after overpaying and asks for a cash refund. State the control and bank entries and explain the direction.
Give me a hint
The business owes the customer the credit balance; paying it back removes that obligation.
Compare my reasoning
- Debit Sales Ledger Control $75 to remove the customer's credit balance.
- Credit Bank $75 because cash leaves the business.
- This is a refund settlement, not a new sales return.
Dr Sales Ledger Control $75; Cr Bank $75. The customer credit balance is refunded and cleared.
Look for these in your work
- Control direction correct
- Bank direction correct
- Refund distinguished
Common mistakes
- Treating a dishonoured cheque as new sales income
- Posting a contra to only one control account
- Using a sales return entry for a cash refund of a customer overpayment
What can you explain now?
A customer's $240 cheque is dishonoured after it was recorded as received. What happens to the customer receivable?
Compare with the explanation
It increases by $240; debit Sales Ledger Control
The failed settlement restores the amount due from the customer.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
Why does a dishonoured cheque increase a customer's balance without creating a new sale?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.