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Question 1 Explain the difference between capital expenditure and revenue expenditure. Include examples in your answer. [10 marks] Question 2 The following balances were extracted from the books of Shilongo Traders on 1 January 2020. Dr Cr Purchases Ledger 1 912 83 025 Sales Ledger 130 905 1 940 In the month of January 2020, the following transactions were made: Debit balance on Sales Ledger transferred to Purchases Ledger 4 956 Debtor's cheque dishonoured 1 908 Sales on credit 133 650 Credit purchases 96 645 Returns outwards to credit suppliers 3 795 Returns inwards from credit customers 1 590 Cash sales 19 005 Cash purchases 10 913 1 305

Sales on credit 133 650 Credit purchases 96 645 Returns outwards to credit suppliers 3 795 Returns inwards from credit customers 1 590 Cash sales 19 005 Cash purchases 10 913 Discount allowed 1 305 Discount received 1 600 Allowance for credit losses 474 Payments to credit suppliers 81 540 Receipts from credit customers 127 385 Refund to customer for overpayment 600 At 1 February 2020, the following information was available: Purchases Ledger debit balances 480 Sales Ledger credit balances 787 Required: (a) Prepare the Purchases Ledger Control Account for the month of January 2020 [13 marks] (b) Sales Ledger Control Account for the month of January 2020. [15 marks] (c) Explain six advantages of using control accounts. [12 marks]

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Sales on credit 133 650 Credit purchases 96 645 Returns outwards to credit suppliers 3 795 Returns inwards from credit customers 1 590 Cash sales 19...
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