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Difficulty: EasyControl Account Error Corrections and Ledger Reconciliation

Prior to reconciliation, the Purchases Ledger Control Account of Bisi Stores showed a credit balance of ₦210,000\text{₦}210,000. An audit revealed that a purchases journal total of ₦15,000\text{₦}15,000 was completely omitted from posting to the Purchases Ledger Control Account. What is the corrected balance of the Purchases Ledger Control Account in Naira?

Answer: 225000 ₦

Answer

The corrected balance of the Purchases Ledger Control Account is ₦225,000\text{₦}225,000.
Purchases on credit increase total trade payables (creditors). Omitting a purchases journal total from the Purchases Ledger Control Account understates the credit balance. Adding the omitted ₦15,000\text{₦}15,000 to the initial credit balance of ₦210,000\text{₦}210,000 yields the corrected balance of ₦225,000\text{₦}225,000.

Step-by-Step Solution

1
Identify the unadjusted credit balance
Unadjusted balance = ₦210,000\text{₦}210,000
This represents the initial balance of the control account prior to adjustments.
2
Apply the correction for the omitted purchases journal total
Corrected credit balance = ₦210,000+₦15,000=₦225,000\text{₦}210,000 + \text{₦}15,000 = \text{₦}225,000
Credit purchases increase the liability owed to trade creditors; omitting the total requires adding (crediting) it to the control account balance.

Key Concept

Correcting omissions in the Purchases Ledger Control Account
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Topics

Control Account Error Corrections and Ledger Reconciliation

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