Prior to reconciliation, the Purchases Ledger Control Account of Kalu Traders showed a cre… — JAMB UTME

Prior to reconciliation, the Purchases Ledger Control Account of Kalu Traders showed a credit balance of $₦248,500$ on 31 December 2025. Upon auditing the accounting records, the following errors were discovered:

1. A credit purchase invoice for $₦14,200$ was completely omitted from the Purchases Journal.
2. Returns outwards of $₦6,800$ were posted to the credit side of the Purchases Ledger Control Account instead of the debit side.
3. Discount received amounting to $₦3,500$ was recorded correctly in the cash book but omitted from the control account.
4. The total of the Purchases Day Book was overcast by $₦5,000$ .

What is the correct adjusted balance of the Purchases Ledger Control Account?

Answer: 240600 ₦

Answer

The adjusted balance of the Purchases Ledger Control Account is ₦240,600.

To calculate the adjusted credit balance of the Purchases Ledger Control Account, start with the unadjusted figure of

₦248,500

. Add

₦14,200

for omitted credit purchases. Subtract

₦13,600

to correct returns outwards wrongly credited (

2 \times ₦6,800

). Subtract

₦3,500

for omitted discount received and

₦5,000

for the overcast purchases day book. The resulting corrected credit balance is

₦240,600

Step-by-Step Solution

Identify the unadjusted credit balance

Unadjusted credit balance = ₦248,500

This serves as the starting figure prior to adjustments.

Adjust for omitted purchase invoice

Credit Purchases Ledger Control Account by ₦14,200

Credit purchases increase creditors, so omitting the invoice requires a credit entry.

Correct returns outwards wrongly credited

Debit Purchases Ledger Control Account by ₦13,600

Posting returns outwards to the credit side requires debiting double the amount (₦6,800 to reverse wrong credit + ₦6,800 to post correct debit).

Adjust for omitted discount received and overcast day book total

Debit control account by ₦3,500 and ₦5,000 respectively

Discount received reduces total liability to creditors. Overcasting the day book resulted in an excessive credit entry that must be reduced with a debit.

Compute final adjusted credit balance

Adjusted balance = ₦240,600

₦248,500 + ₦14,200 - ₦13,600 - ₦3,500 - ₦5,000 = ₦240,600.

Key Concept

Purchases Ledger Control Account Error Correction

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