Use the information below to answer question . Purchases ledger opening balances ₦4,000 Sales ledger opening balances ₦6,000 Credit purchases during the yea...
Question 1 Report
Use the information below to answer question . Purchases ledger opening balances ₦4,000 Sales ledger opening balances ₦6,000 Credit purchases during the year ₦25,000 Discounts allowed ₦1,000 Returns inwards ₦2,000 Credit sales during the year ₦10,000 Returns outwards ₦6,000What is the purchases ledger balance?
Answer Details
To find the purchases ledger balance, we need to take into account the opening balance of ₦4,000, add any credit purchases made during the year (₦25,000), and subtract any returns made to suppliers (returns outwards) during the year (₦6,000). The formula for calculating the purchases ledger balance is as follows:
Purchases Ledger Balance = Opening Balance + Credit Purchases - Returns Outwards
Plugging in the numbers from the question, we get:
Purchases Ledger Balance = ₦4,000 + ₦25,000 - ₦6,000
Purchases Ledger Balance = ₦23,000
Therefore, the answer is ₦23,000.
In simpler terms, the purchases ledger balance is the total amount owed to suppliers after accounting for the opening balance, any new credit purchases, and any returns made to suppliers during the year.
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