unit 30 help - Accounting for Purchases

Hi, im new to this so hope im doing it right!!
I was wondering if anyone would be able to help me out
Unit 30 - Page 320 & 321 in the book

I dont understand why for the example shown they have put the purchases ledger control account as a debit when usual it would be a credit would it not??

And also, why have they not made an account for the total - £9,357.26?
Is this different from the normal purchases double-keeping with it being analysed?

Please help if you can.
Thank You

Comments

  • georgyggeorgyg Just Joined Posts: 1Registered
    Hi Steph
    I'm guessing you are referring to the Kaplan text book (I had it open on the pages you mention so I think we are looking at the same pages!)

    The amount posted to PLCA is listed as a debit because in this instance you are dealing with payments so by making a payment you are reducing the balance of the liability - reduce a liability = debit. (I think maybe this example is a little confusing as they have not shown any liability on the credit side)

    For your second point "and also, why have they not made an account for the total - £9,357.26?" - have a look at page 322 "... The credit entry is the total column of the cash payments book ....." The cash payment book is part of the double entry.

    I really hope I make sense - this is my first time on here too and my first attempt at any accountancy exam.
  • steph10pinksteph10pink New Member Posts: 8Registered
    Thanx Georgy G. This has helped me, starting to sink in a little more now
  • A-VicA-Vic Expertise Guaranteed Posts: 6,970Registered
  • dziumbrauskaitedziumbrauskaite Feels At Home Posts: 42Registered
    Hey Steph,

    I have the Kaplan book as well, so can help you with this example.
    I would agree with Georgyg. Normally purchase ledger control would be credit as it is liability to the supplier, but in this example we are dealing with payments made, so there is no longer any liability to the supplier as we paid, therefore we need to debit PLCA.

    As payment book is analysed, therefore we post purchases ledger total from the cash payment book to the PLCA and eg. rent total from cash payment book to the rent account. And the total 9357.26 includes not just purchase ledger total, but cash purchases, rent etc.
    Hope it will help..
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