Q. Senji does not keep proper accounting records, and it is necessary to calculate her total purchases for the year ended 31 January 20X4 from the following information:
Trade payables
31 January 20X3 130,400
31 January 20X4 171,250
Payments to suppliers 888,400
Cost of goods taken by Senji for her personal use 1,000
Refund received from suppliers 2,400
Discounts received 11,200
Compute the figure for purchases for inclusion in Senji's financial statements?
A $914,650
B $937,050
C $939,050
D $941,850
B is the answer
Sir, In this question in order to find the purchase figure we need to draw up a payable ledger control account.
Goods taken by the Senji for personal use wont appear in PLCA since we Debit drawings and Credit purchase.
But it is credited to PLCA why?
Ask the Tutor ACCA FA
Incomplete records question 20.10
5y ago#1If you choose to do your workings in t-accounts (although appreciate that you cannot be asked to actually write up t-accounts in the exam), then we do not credit the control account with the drawings.
If you ignore the drawings, then the missing figure in the control account is 938,050 and this is debited to purchases.
We then credit the purchases with 1,000, which leaves 937,050 as purchases for the SOPL.
(But again, how you do your workings does not matter (because nobody will look at the workings) and provided you end up with the correct answer then that is all that matters :-)
Understood, Thank you sir!
5y ago#3You are welcome :-)
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