Purchases ledger control account

Topic 12: Purchases Ledger Control Account — 50 Hard MCQs

1. A purchases ledger control account has the following information.

Item	$
opening trade payables	36 000
credit purchases	124 000
cash paid to credit suppliers	98 000
purchases returns	6200
discount received	2800
contra with sales ledger	3500

What is the closing trade payables balance?

A $47 500
B $49 500
C $52 000
D $55 500

2. A purchases ledger control account has opening credit balances of $58 000 and opening debit balances of $1400. Credit purchases were $176 000. Payments to suppliers were $162 000. Purchases returns were $5400 and discounts received were $3600. Closing debit balances were $900.

What are closing credit balances?

A $62 500
B $64 500
C $66 500
D $68 500

3. A business had opening trade payables of $44 000. During the year, credit purchases were $135 000, payments to suppliers were $121 000, discounts received were $2900, purchases returns were $4700, and contra entries were $1800.

What was the closing trade payables balance?

A $46 600
B $48 600
C $50 600
D $53 400

4. Which item is recorded on the credit side of the purchases ledger control account?

A discount received
B purchases returns
C credit purchases
D cash paid to suppliers

5. Which item is recorded on the debit side of the purchases ledger control account?

A credit purchases
B refund received from supplier
C interest charged by supplier
D contra entry with sales ledger

6. A supplier allows the business a cash discount of $760.

How is this recorded in the purchases ledger control account?

A debit purchases ledger control $760
B credit purchases ledger control $760
C debit discount allowed $760
D credit cash book $760

7. A business returns goods costing $1850 to a credit supplier.

How is this recorded in the purchases ledger control account?

A debit purchases ledger control $1850
B credit purchases ledger control $1850
C debit purchases returns $1850
D credit purchases $1850

8. A supplier is also a customer. A payable balance of $2400 is offset against a receivable balance.

How is this recorded in the purchases ledger control account?

A debit purchases ledger control $2400
B credit purchases ledger control $2400
C debit sales ledger control $2400
D credit purchases $2400

9. A refund of $700 is received from a supplier because the business had overpaid.

How is this recorded in the purchases ledger control account?

A debit purchases ledger control $700
B credit purchases ledger control $700
C debit purchases returns $700
D credit bank $700

10. Interest of $360 is charged by a supplier on an overdue account.

How is this recorded in the purchases ledger control account?

A debit purchases ledger control $360
B credit purchases ledger control $360
C debit discount received $360
D credit bank $360

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. A purchases ledger control account has the following details.

Item	$
opening credit balances	72 000
credit purchases	210 000
payments to suppliers	196 000
purchases returns	7500
discount received	4200
interest charged by suppliers	1100

What are closing credit balances, assuming no debit balances?

A $75 400
B $76 400
C $77 400
D $79 800

12. A purchases ledger control account has opening credit balances of $84 500. Credit purchases were $248 000. Payments to suppliers were $226 000. Discounts received were $5300, purchases returns were $8200, and a refund received from a supplier was $1800.

What is the closing credit balance?

A $89 200
B $91 200
C $94 800
D $97 200

13. A purchases ledger control account shows a closing credit balance of $63 000. The list of balances extracted from the purchases ledger totals $60 400.

Which error could explain the difference?

A credit purchases of $2600 omitted from the control account only
B discount received of $2600 omitted from the control account only
C purchases returns of $2600 omitted from the control account only
D payment to supplier of $2600 omitted from the control account only

14. A purchases ledger control account shows a balance of $41 600. Later, purchases returns of $1300 are found to have been omitted from the control account.

What is the corrected balance?

A $40 300
B $41 600
C $42 900
D $44 200

15. A purchases ledger control account shows a balance of $52 800. Later, interest charged by a supplier of $600 is discovered.

What is the corrected balance?

A $52 200
B $52 800
C $53 400
D $54 000

16. A purchases ledger control account includes sales tax. A credit purchase of goods worth $8000 plus sales tax at 15% is made.

What amount is credited to the purchases ledger control account?

A $1200
B $6800
C $8000
D $9200

17. Goods bought on credit for $3500 plus sales tax at 20% are returned to the supplier.

What amount is debited to the purchases ledger control account?

A $700
B $2800
C $3500
D $4200

18. Credit purchases excluding sales tax were $120 000. Sales tax was 10%. Payments to suppliers were $103 000. Purchases returns excluding sales tax were $7000.

What is the net increase in the purchases ledger control account before other items?

A $17 000
B $21 300
C $22 300
D $29 000

19. Which item is not normally entered in the purchases ledger control account?

A credit purchases
B cash purchases
C discount received
D purchases returns

20. Which item would increase the purchases ledger control account balance?

A purchases returns
B cash paid to suppliers
C credit purchases
D discount received

21. Which item would decrease the purchases ledger control account balance?

A interest charged by supplier
B refund received from supplier
C credit purchases
D supplier’s invoice received

22. A debit balance in an individual supplier account is most likely caused by:

A an overpayment to a supplier
B goods bought on credit
C supplier charging interest
D purchases returns being omitted

23. In a purchases ledger control account, opening debit balances are entered:

A on the debit side
B on the credit side
C only in the sales ledger control account
D only in the income statement

24. In a purchases ledger control account, closing debit balances are entered:

A on the debit side as a balance carried down
B on the credit side as a balance carried down
C on the credit side as a balance brought down
D in the purchases account only

25. A purchases ledger control account has opening credit balances of $47 000 and opening debit balances of $900. Credit purchases were $156 000. Payments were $142 000. Discounts received were $3100, purchases returns were $6800 and closing debit balances were $400.

What are closing credit balances?

A $50 600
B $51 000
C $51 400
D $52 200

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

26. A business has opening trade payables of $76 000 and closing trade payables of $89 000. During the year, payments to suppliers were $212 000, purchases returns were $9400 and discounts received were $5600.

What were credit purchases?

A $230 600
B $239 000
C $240 000
D $251 000

27. A business has opening trade payables of $58 000 and closing trade payables of $49 000. Credit purchases were $184 000. Purchases returns were $7200 and discount received was $3900.

What cash was paid to credit suppliers?

A $173 900
B $181 900
C $185 900
D $192 100

28. A business has opening purchases ledger credit balances of $93 000. Credit purchases were $285 000. Payments to suppliers were $262 000. Discounts received were $6800. Purchases returns were $10 200. Closing credit balances were $96 000.

What item is missing if it is a contra with the sales ledger?

A $2000
B $3000
C $4000
D $5000

29. A purchases ledger control account has opening credit balances of $65 000 and opening debit balances of $1800. During the year, credit purchases were $230 000, payments were $211 000, discounts received were $4400, purchases returns were $9300, contra entries were $2500, and closing debit balances were $700.

What are closing credit balances?

A $66 700
B $67 700
C $68 700
D $70 300

30. A purchases ledger control account has opening credit balance $38 000. Credit purchases $120 000. Payments to suppliers $108 000. Discounts received $2500. Purchases returns $3600. Interest charged by suppliers $800.

What is the closing balance?

A $44 700
B $45 500
C $46 300
D $47 100

31. A purchases ledger control account balance is understated by $2800.

Which error could have caused this?

A credit purchases omitted from the purchases ledger control account
B purchases returns omitted from the purchases ledger control account
C discount received omitted from the purchases ledger control account
D cash paid to suppliers omitted from the purchases ledger control account

32. A purchases ledger control account balance is overstated by $1500.

Which error could have caused this?

A interest charged by supplier omitted from the control account
B credit purchases understated in the control account
C purchases returns omitted from the control account
D supplier refund entered on the credit side of the control account

33. A business discovers that cash paid to suppliers of $7200 was entered correctly in the cash book but recorded in the purchases ledger control account as $2700.

What correction is required in the purchases ledger control account?

A debit $4500
B credit $4500
C debit $9900
D credit $9900

34. A credit purchase of $6800 was recorded in the purchases journal as $8600 and posted to the purchases ledger control account as $8600.

What correction is required in the purchases ledger control account?

A debit purchases ledger control $1800
B credit purchases ledger control $1800
C debit purchases ledger control $15 400
D credit purchases ledger control $15 400

35. Purchases returns of $1250 were recorded in the purchases returns journal as $1520 and posted to the purchases ledger control account as $1520.

What correction is required in the purchases ledger control account?

A debit purchases ledger control $270
B credit purchases ledger control $270
C debit purchases returns $270
D credit purchases returns $270

36. A discount received of $540 was entered in the purchases ledger control account as $450.

What correction is required?

A debit purchases ledger control $90
B credit purchases ledger control $90
C debit purchases ledger control $990
D credit purchases ledger control $990

37. A contra entry of $880 was correctly recorded in the sales ledger control account but omitted from the purchases ledger control account.

What correction is required in the purchases ledger control account?

A debit $880
B credit $880
C debit $1760
D credit $1760

38. A supplier refund of $630 was received but omitted from the purchases ledger control account.

What correction is required?

A debit purchases ledger control $630
B credit purchases ledger control $630
C debit purchases returns $630
D credit purchases $630

39. Interest charged by a supplier of $420 was entered in the purchases ledger control account as discount received.

What correction is required in the purchases ledger control account?

A debit $420
B credit $420
C debit $840
D credit $840

40. A purchase invoice of $3400 was recorded correctly in the purchases account but omitted from the purchases ledger control account.

What correction is required?

A debit purchases ledger control $3400
B credit purchases ledger control $3400
C debit purchases $3400
D credit purchases $3400

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. A purchases ledger control account is prepared from:

A individual supplier accounts only
B books of prime entry totals
C bank reconciliation statement only
D sales invoices issued only

42. The total of individual supplier credit balances should agree with:

A purchases account
B purchases ledger control account credit balance
C sales ledger control account debit balance
D bank overdraft only

43. Why is a purchases ledger control account useful?

A it helps check the accuracy of the purchases ledger
B it calculates depreciation
C it records only cash purchases
D it replaces the purchases journal completely

44. Which account is the purchases ledger control account also known as?

A trade receivables control account
B trade payables control account
C sales account
D inventory account

45. A credit balance in the purchases ledger control account represents:

A amount owed by customers
B amount owed to suppliers
C cash sales made
D inventory at year end

46. A debit balance in the purchases ledger control account represents:

A normal amount owed to suppliers
B amount owed by suppliers to the business
C bank overdraft
D purchases returns only

47. A refund of $500 is received from a supplier who had previously been overpaid.

How is this recorded in the purchases ledger control account?

A debit purchases ledger control $500
B credit purchases ledger control $500
C debit purchases returns $500
D credit sales ledger control $500

48. A business pays $900 to a supplier whose account had a credit balance of $700 and a debit balance of $200.

What amount reduces the purchases ledger control account credit balance?

A $200
B $700
C $900
D $1100

49. A supplier balance of $1200 is transferred from the purchases ledger to the sales ledger because the supplier is also a customer.

How is this recorded in the purchases ledger control account?

A debit purchases ledger control $1200
B credit purchases ledger control $1200
C debit purchases account $1200
D credit sales account $1200

50. A business has closing credit balances of $74 000 and closing debit balances of $2200 in the purchases ledger.

What amount will be shown as trade payables in current liabilities?

A $71 800
B $74 000
C $76 200
D $2200

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

1. B — $49 500

• Closing trade payables = opening payables + credit purchases – payments – returns – discount received – contra

• = 36 000 + 124 000 – 98 000 – 6200 – 2800 – 3500

• = $49 500

2. A — $62 500

• Closing credit balances = opening credit + credit purchases + closing debit – opening debit – payments – returns – discounts

• = 58 000 + 176 000 + 900 – 1400 – 162 000 – 5400 – 3600

• = $62 500

3. B — $48 600

• Closing trade payables = 44 000 + 135 000 – 121 000 – 2900 – 4700 – 1800

• = $48 600

4. C — credit purchases

• Credit purchases increase the amount owed to suppliers.

• Purchases ledger control account is credited.

5. D — contra entry with sales ledger

• Contra reduces the amount owed to suppliers.

• It is recorded on the debit side of the purchases ledger control account.

6. A — debit purchases ledger control $760

• Discount received reduces the amount owed to suppliers.

• Reduction in payables = debit purchases ledger control.

7. A — debit purchases ledger control $1850

• Goods returned to supplier reduce trade payables.

• Purchases ledger control account is debited.

8. A — debit purchases ledger control $2400

• Contra reduces the payable balance.

• Purchases ledger control is debited.

9. B — credit purchases ledger control $700

• Refund received from supplier is recorded as:

  • debit bank

  • credit purchases ledger control

• It usually clears/reduces a debit balance in the supplier account.

10. B — credit purchases ledger control $360

• Interest charged by supplier increases amount owed.

• Purchases ledger control is credited.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

11. A — $75 400

• Closing credit balance = 72 000 + 210 000 + 1100 – 196 000 – 7500 – 4200

• = $75 400

• Interest charged increases payables, so it is added.

12. C — $94 800

• Closing credit balance = 84 500 + 248 000 + 1800 – 226 000 – 5300 – 8200

• = $94 800

• Supplier refund received is credited to the control account.

13. No single correct answer — B, C and D could all explain it

• Control account = $63 000

• List of balances = $60 400

• Control account is too high by $2600.

• Omitted debit items would reduce it:

  • discount received omitted

  • purchases returns omitted

  • payment to supplier omitted

• So the MCQ needs correction.

14. A — $40 300

• Purchases returns reduce payables.

• Corrected balance = 41 600 – 1300

• = $40 300

15. C — $53 400

• Interest charged by supplier increases amount owed.

• Corrected balance = 52 800 + 600

• = $53 400

16. D — $9200

• Goods value = $8000

• Sales tax = 15% × 8000 = $1200

• Total payable = 8000 + 1200

• = $9200

17. D — $4200

• Goods returned = $3500

• Sales tax = 20% × 3500 = $700

• Total reduction in payables = 3500 + 700

• = $4200

18. B — $21 300

• Credit purchases including sales tax = 120 000 × 1.10 = $132 000

• Purchases returns including sales tax = 7000 × 1.10 = $7700

• Net increase = 132 000 – 103 000 – 7700

• = $21 300

19. B — cash purchases

• Purchases ledger control records credit suppliers.

• Cash purchases do not create trade payables, so they are not entered.

20. C — credit purchases

• Credit purchases increase the amount owed to suppliers.

• They increase the purchases ledger control account balance.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

21. No correct option

• Items that decrease the purchases ledger control account balance include:

  • payments to suppliers

  • purchases returns

  • discount received

  • contra entries

• Interest charged, credit purchases and supplier invoices increase payables.

• Supplier refund received is usually credited to the control account, so it does not fit as a normal decrease of credit payables.

22. A — an overpayment to a supplier

• A debit balance in a supplier account means the supplier owes the business.

• This usually happens because the business overpaid or returned goods after payment.

23. A — on the debit side

• Opening debit balances in the purchases ledger are brought down on the debit side.

• They represent amounts owed by suppliers to the business.

24. B — on the credit side as a balance carried down

• Closing debit balances are carried down on the credit side to balance the account.

• They are then brought down on the debit side next period.

25. A — $50 600

• Closing credit balances = opening credit + credit purchases + closing debit – opening debit – payments – discounts – returns

• = 47 000 + 156 000 + 400 – 900 – 142 000 – 3100 – 6800

• = $50 600

26. C — $240 000

• Credit purchases = closing payables + payments + returns + discounts – opening payables

• = 89 000 + 212 000 + 9400 + 5600 – 76 000

• = $240 000

27. B — $181 900

• Payments = opening payables + credit purchases – returns – discount received – closing payables

• = 58 000 + 184 000 – 7200 – 3900 – 49 000

• = $181 900

28. B — $3000

• Balance before contra = opening + purchases – payments – discounts – returns

• = 93 000 + 285 000 – 262 000 – 6800 – 10 200

• = $99 000

• Closing balance = $96 000

• Missing contra = 99 000 – 96 000

• = $3000

29. A — $66 700

• Closing credit balances = opening credit + purchases + closing debit – opening debit – payments – discounts – returns – contra

• = 65 000 + 230 000 + 700 – 1800 – 211 000 – 4400 – 9300 – 2500

• = $66 700

30. A — $44 700

• Closing balance = 38 000 + 120 000 + 800 – 108 000 – 2500 – 3600

• = $44 700

• Interest charged increases payables.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

31. A — credit purchases omitted from the purchases ledger control account

• Credit purchases increase payables.

• If omitted, the control account balance is understated.

32. C — purchases returns omitted from the control account

• Purchases returns reduce payables.

• If omitted, payables remain too high.

• Therefore, the control account is overstated.

33. A — debit $4500

• Correct payment = $7200

• Recorded in purchases ledger control = $2700

• Further debit needed = 7200 – 2700

• = $4500

34. A — debit purchases ledger control $1800

• Correct credit purchase = $6800

• Recorded = $8600

• Payables overstated by $1800

• Correct by debiting purchases ledger control $1800.

35. B — credit purchases ledger control $270

• Correct purchases returns = $1250

• Recorded = $1520

• Debit was too high by $270.

• Correct by crediting purchases ledger control $270.

36. A — debit purchases ledger control $90

• Correct discount received = $540

• Recorded = $450

• Further reduction in payables needed = $90

• Debit purchases ledger control $90.

37. A — debit $880

• Contra reduces the amount owed to suppliers.

• Purchases ledger control should be debited by $880.

38. B — credit purchases ledger control $630

• Supplier refund received is recorded:

  • debit bank

  • credit purchases ledger control

• Correction = credit purchases ledger control $630.

39. D — credit $840

• Interest charged should credit purchases ledger control $420.

• It was wrongly entered as discount received, which means the control account was debited $420.

• To reverse the wrong debit and record the correct credit:

  • credit purchases ledger control $840

40. B — credit purchases ledger control $3400

• Purchase invoice increases amount owed to supplier.

• If omitted, credit purchases ledger control $3400.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.

41. B — books of prime entry totals

• Purchases ledger control account is prepared from totals in books of prime entry.

• It is not built by adding individual supplier accounts.

42. B — purchases ledger control account credit balance

• Total individual supplier credit balances should agree with the purchases ledger control account credit balance.

43. A — it helps check the accuracy of the purchases ledger

• Control accounts help detect errors in ledger accounts.

• If the control account differs from the list of balances, an error exists.

44. B — trade payables control account

• Purchases ledger control account is also called trade payables control account.

45. B — amount owed to suppliers

• A credit balance in the purchases ledger control account represents trade payables.

46. B — amount owed by suppliers to the business

• A debit balance is abnormal.

• It usually means the business has overpaid a supplier or is due a refund.

47. B — credit purchases ledger control $500

• Refund received from supplier:

  • debit bank

  • credit purchases ledger control

48. C — $900

• Payment to supplier is entered as a debit in the purchases ledger control account.

• It reduces the net control account credit balance by $900.

• If the supplier was only owed $700, the extra $200 creates a debit balance.

49. A — debit purchases ledger control $1200

• Contra/transfer reduces the payable balance.

• Purchases ledger control is debited.

50. B — $74 000

• Closing credit balances are shown as trade payables in current liabilities.

• Closing debit balances are shown separately as current assets.

• Do not net them off unless specifically required.

Written and Compiled By Sir Hunain Zia (AYLOTI), World Record Holder With 154 Total A Grades, 11 World Records and 7 Distinctions, Educate A Change.