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ACCA Applied Knowledge · Financial Accounting · General ledger accounts and journal entries

The payables ledger control account of Hurst Co has an opening credit balance of $32,400. During the period: purchases on credit were $118,000; payments to suppliers were $104,500; discounts received were $2,300; and purchase returns were $4,100. What is the closing balance?

The closing balance is $39,500 credit. Opening payables plus credit purchases total $150,400, and payments, discounts received and returns total $110,900 on the debit side. The difference is the closing credit balance.

  1. A$39,500 creditCorrect
  2. B$43,500 credit
  3. C$39,500 debit
  4. D$35,300 credit

Explanation

Credits: opening 32,400 + purchases 118,000 = 150,400. Debits: payments 104,500 + discounts 2,300 + returns 4,100 = 110,900. Closing credit balance = 150,400 - 110,900 = 39,500. Option 2 omits the discounts and returns incorrectly handled (adding the discount).

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