A purchases ledger control account has an opening credit balance of Rs. 60,000, credit purchases of Rs. 220,000, payments to suppliers of Rs. 180,000, returns outward of Rs. 12,000 and discounts received of Rs. 8,000. What is the closing balance?
Correct answer: B. Rs. 80,000 credit
- A. Rs. 68,000 credit
- B. Rs. 80,000 credit
- C. Rs. 92,000 credit
- D. Rs. 104,000 credit
Explanation
The closing payable is Rs. 60,000 + Rs. 220,000 - Rs. 180,000 - Rs. 12,000 - Rs. 8,000 = Rs. 80,000. Payments, returns outward and discounts received reduce the amount owed to suppliers.
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About Bank Reconciliation and Control Accounts
Bank reconciliation explains differences between the cash book and bank statement through unpresented cheques, outstanding deposits, bank charges, direct payments, credited amounts and recording errors. Control accounts summarise receivables and payables ledgers, and their balances are reconciled with individual accounts to locate discrepancies.
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More Bank Reconciliation and Control Accounts questions
In a sales ledger control account, which item is normally recorded on the debit side?
A bank reconciliation statement is prepared after all known bank charges and direct receipts have been entered in the cash book. Which item would still normally appear as a reconciliation item?
The bank statement shows a favourable balance of Rs. 42,000. Cheques issued but not presented total Rs. 6,000, while deposits recorded in the cash book but not yet credited total Rs. 9,000. What is the cash book balance?
Which source normally provides the total of credit purchases posted to the purchases ledger control account?
A control account is used in a general ledger while detailed customer or supplier accounts are kept in subsidiary ledgers. Which feature is a major advantage of this arrangement?
A sales ledger control account has a debit balance. What does this balance normally represent?