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Difficulty: MediumPurchases Ledger Control Account

The following transaction balances were extracted from the books of Alabi & Sons for the year ended 31st December 2025:

Transaction DetailsAmount (₦)
Opening balance of creditors (1st Jan 2025)45,000
Payments to creditors by cash and cheque250,000
Discount received12,000
Returns outwards8,500
Returns inwards6,000
Cash purchases35,000
Closing balance of creditors (31st Dec 2025)52,000

What is the total credit purchases for the year?

  1. ₦277,500Answer
  2. B
    ₦253,500
  3. C
    ₦283,500
  4. D
    ₦312,500

Answer

₦277,500
The correct figure of ₦277,500 is calculated by totaling the debit side of the Purchases Ledger Control Account (payments of ₦250,000 + discount received of ₦12,000 + returns outwards of ₦8,500 + closing balance of ₦52,000 = ₦322,500) and subtracting the opening balance of ₦45,000.

Step-by-Step Solution

1
Filter relevant items for the Purchases Ledger Control Account
Relevant items are opening balance (credit ₦45,000), payments (debit ₦250,000), discount received (debit ₦12,000), returns outwards (debit ₦8,500), and closing balance (debit ₦52,000). Returns inwards and cash purchases are excluded.
Returns inwards belong to the sales ledger control account, and cash purchases do not affect individual creditors' ledger accounts.
2
Sum all debit side entries including the closing balance
Total debit entries = ₦250,000 + ₦12,000 + ₦8,500 + ₦52,000 = ₦322,500
Items reducing creditors and the balance carried down are placed on the debit side of the control account.
3
Deduct opening balance from total debit side to find credit purchases
Credit Purchases = ₦322,500 - ₦45,000 = ₦277,500
The Purchases Ledger Control Account total on the debit side must equal the total on the credit side.

Key Concept

Purchases Ledger Control Account Balancing and Item Selection
Estimated Time:1m 30s
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Topics

Purchases Ledger Control Account

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