Question on: JAMB Accounting - 2017
Given:
I. Cash refunds
II. Debit note issued
III. Dishonored cheque
IV. Purchases
The item on the credit side of purchases ledger control account includes
A
I,II and III only
B
I and II only
C
III and IV only
D
I, III and IV only
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Correct Option: D
The purchases ledger control account summarizes the total purchases made on credit. Items that would reduce the amount owed to suppliers are credited.
- I. Cash refunds: Cash refunds reduce the amount owed to suppliers.
- II. Debit note issued: A debit note is issued when goods are returned to the supplier, reducing the amount owed.
- III. Dishonored cheque: A dishonored cheque relates to the supplier's bank account, so it doesn't affect the purchases ledger.
- IV. Purchases: Purchases increase the amount owed to suppliers and are debited in the purchases ledger control account.
Therefore, only cash refunds and debit notes issued are on the credit side.
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