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WAEC Financial Accounting 2024 Question 17

Question 17

Control Accounts

Use the following information to answer questions 17 and 18.
Bayo issued a credit note to Ayo who returned defective goods. Each parties maintain sales ledger control account and purchases ledger control account.
Ayo will record this transaction on the

  1. A.debit side of the sales ledger control account.
  2. B.credit side of the sales ledger control account.
  3. C.debit side of the purchases ledger control account.
  4. D.credit side of the purchases ledger control account.
Show the answer and explanation

Answer: C (debit side of the purchases ledger control account.)

Explanation

Ayo is the buyer returning goods (returns outwards), which reduces what he owes Bayo, so he debits his purchases ledger control account.