Purchases Ledger Control Account Components

Steps:

• Identify the purchases ledger as recording credit transactions with suppliers (creditors).
• Recall that the control account summarizes balances owed to suppliers, including debits for credit purchases and credits for returns, discounts received, and payments.
• Evaluate each option against credit supplier transactions only.
• Select the option that directly adjusts the creditors balance via returns.

Why the correct option is correct:

• Goods returned to credit suppliers (returns outwards) are credited to the control account, reducing the amount owed per the double-entry rule for payables.

Why the others are wrong:

• A: Cash purchases are paid immediately and recorded in the cash book, not the credit-based purchases ledger.
• B: Debts written off apply to the sales ledger (receivables), not payables in the purchases ledger.
• C: Discount allowed is given to debtors and affects the sales ledger control account, not purchases.

Final answer: D