Day: April 22, 2024

The following payables control account for an entity where all goods are purchased on credit contains some errors.

PAYABLES CONTROL ACCOUNT

DR   Purchases                         £481,600

DR  Discounts received             £6,300

DR  Contras with receivables  £2,100

DR  Closing balance                 £205,200

DR  Total                               £695,200

                                                            CR  Opening balance          £192,300

                                                            CR  Cash paid to suppliers  £494,200

                                                            CR  Cash refunds                 £8,700

                                                            CR  Total                           £695,200

What will the closing balance be when the errors have been corrected?

Select ONE answer:

1. £180,000
2. £184,200
3. £162,600
4. £192,600

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct –   DRs Cash paid to suppliers £494,200, Contras with receivables £2,100, Discounts received  £6,300  Total £682,600. CRs  Opening balance £192,300, Purchases £481,600, Cash refunds £8,700  Total £682,600
2. Not correct
3. Not correct
4. Not correct

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