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ACCA Applied Knowledge · Financial Accounting · Receivables and payables

Which one of the following is a purpose of maintaining a purchases ledger control account?

A purchases ledger control account provides a total figure for payables that can be compared with the sum of individual supplier balances, helping detect errors. It does not replace individual supplier accounts or supplier statement reconciliations, which are still needed.

  1. AIt records the cash paid to each individual supplier
  2. BIt replaces the need for a supplier statement reconciliation
  3. CIt helps locate errors by providing a total to check against the individual supplier balancesCorrect
  4. DIt removes the need for individual supplier accounts

Explanation

The control account gives an independent total of payables that is compared with the sum of the individual ledger balances, helping detect errors and fraud. It does not replace individual accounts or supplier statement reconciliations. Individual supplier accounts still record each supplier's detail.

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