Worked example 1

Sales ledger control opening balance $12,000 DR. Credit sales $45,000; receipts $38,000; credit notes $2,000. Calculate closing balance.

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Sales ledger control account: Opening balance b/d 12,000 DR Credit sales 45,000 DR Receipts 38,000 CR Credit notes 2,000 CR

Closing balance c/d = 12,000 + 45,000 − 38,000 − 2,000 = ** $17,000 DR**$

Meaning: Total trade receivables at year-end $17,000 — should equal sum of individual customer balances.

Worked example 2

A business provides the following information for its Purchases Ledger Control Account for the year ended 31 December 2023:

Balance at 1 Jan 2023: $25,400 (Credit)
Payments to suppliers: $155,600$
Discounts received: $3,100$
Returns outwards: $4,800$
Contra entry (set-off against sales ledger): $1,200$
Balance at 31 Dec 2023: $28,900 (Credit)

Calculate the value of credit purchases for the year.

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1. Set up the Purchases Ledger Control Account (PLCA): The PLCA is a liability account, so increases (purchases) are credits, and decreases (payments, returns, discounts) are debits.

Purchases Ledger Control Account

Details	$	Details	$
Payments to suppliers	155,600	Balance b/d	25,400
---	---	---	---
Discounts received	3,100	Credit Purchases (balancing figure)	168,200
Returns outwards	4,800
Contra entry	1,200
Balance c/d	28,900
Total	193,600	Total	193,600

2. Calculate the missing figure:

Total the debit side (items that decrease the amount owed): 155,600 (Payments) + 3,100 (Discounts) + 4,800 (Returns) + 1,200 (Contra) + 28,900 (Closing Balance) = $193,600.$
The total of the credit side must also be $193,600.$
The credit side consists of the opening balance and the credit purchases.
Credit Purchases = Total Credits - Opening Balance
Credit Purchases = $193,600 -$ 25,400 = ** $168,200**.$

Answer: The credit purchases for the year were ** $168,200**.$

Control accounts — practice questions

Worked example 1

Worked example 2