Match each accounting transaction item on the left with its correct entry placement in the Purchases Ledger Control Account on the right.
- Discount received from suppliersDebit side entry (reduces amount owed to trade creditors)
- Credit purchases for the accounting periodCredit side entry (increases total liability to trade creditors)
- Returns outwards to trade creditorsDebit side entry (reflects reduction in creditors for returned goods)
- Interest charged by suppliers on overdue balancesCredit side entry (reflects additional expense added to creditors liability)
Cevap
Discount received and Returns outwards are debited to the Purchases Ledger Control Account because they reduce liability to suppliers, while Credit purchases and Interest charged by suppliers are credited because they increase liability to suppliers.
The Purchases Ledger Control Account acts as a total creditors account. Any transaction that reduces the debt owed to trade creditors (such as discount received, cash/cheque payments, and returns outwards) is entered on the debit side. Any transaction that increases the debt owed (such as credit purchases, interest charged by suppliers on overdue accounts, and refund/dishonoured cheques) is entered on the credit side.
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Posting rules for Purchases Ledger Control Account