Concept:The sales ledger control account records the total amount owed by debtors. Its debit side shows all items that increase the amount receivable from debtors.
Explanation:Bills dishonored by debtors occur when a bill of exchange previously accepted by a debtor is not paid on its due date.
When this happens, the debt becomes payable by the debtor again, so the amount is transferred back to the debtor's account.
Therefore, this entry increases the total debtors' balance and is recorded on the debit side of the sales ledger control account.
Other options like returns inwards and bad debts reduce the amount owed by debtors and appear on the credit side.
Bills accepted by debtors also reduce the balance because the debt is replaced by a bill receivable.
Answer:C. bills dishonored by debtors