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The closing balance of the purchase ledger control account at the year end had been undercast by 160.
The answer: As a closing liability balance has been undercast, this will have caused a credit entry to the suspense and will need correction by debiting suspense and crediting purchase ledger control account with 160.
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Why? Isn’t the purchases account a debit? So if it was undercast shouldn’t the suspense account have been created with a debit of 160? and therefore a credit to correct it?
I’m confused where the answer says its a closing liability, this is the purchase account not the payables account?
In future you must ask in the Ask the Tutor Forum if you want me to answer (this forum is for students to help each other).
The purchases account is a debit balance, but this is not what the question is referring to. It refers to the purchase ledger control account which is another name for the payables control account (i.e. total payables account), and the balance on payables will be a credit balance.
I do suggest that you watch my free lectures on Books of Prime Entry.
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