Debits reduce creditor liability in purchases ledger control account

Steps:

• Purchases ledger control account tracks total creditors (suppliers owed money), with normal credit balance.
• Debit entries reduce this liability, such as payments or returns to suppliers.
• Assume item 1: returns outwards (reduces amount owed); item 2: payments to suppliers (settles debt); item 3: credit purchases (increases debt).
• Thus, items 1 and 2 go on debit side.

Why A is correct:

• Per double-entry accounting, debits to creditors control account (items 1 and 2) decrease the liability per the accounting equation (Assets = Liabilities + Equity).

Why the others are wrong:

• B includes item 3 (credit purchases), which credits the account to increase liability.
• C omits item 1 (returns outwards), a valid debit reducing owed amounts.
• D selects only item 3, which incorrectly credits rather than debits the account.

Final answer: A