Entries will be made into the payables ledger control account from which book?

Entries will be made into the payables ledger control account from which book?

• A. Purchases day book
• B. Sales day book
• C. Cash book receipts
• D. Bank reconciliation file

Answer: (A)

The payables ledger control account reflects amounts the business owes to suppliers for credit purchases. When a purchase is made on credit, it creates a liability to the supplier, which is recorded by crediting the payables control account and debiting the purchases (or inventory) account. This posting comes from the purchases day book, which records all credit purchases. The other books aren’t sources of these liability postings: the sales day book covers credit sales to customers, the cash book receipts relate to cash received, and the bank reconciliation file is used for reconciling bank statements, not posting to ledgers.

The payables ledger control account reflects amounts the business owes to suppliers for credit purchases. When a purchase is made on credit, it creates a liability to the supplier, which is recorded by crediting the payables control account and debiting the purchases (or inventory) account. This posting comes from the purchases day book, which records all credit purchases. The other books aren’t sources of these liability postings: the sales day book covers credit sales to customers, the cash book receipts relate to cash received, and the bank reconciliation file is used for reconciling bank statements, not posting to ledgers.