Tunde purchased goods from Femi by cash worth N1,000 with 10% cash discount. Tunde’s purchases ledger control account is to be ____
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Correct Answer: Option E
Explanation:
Tunde paid cash to Femi and received a 10% cash discount.
The total value of the goods was ₦1,000, and a 10% discount means Tunde paid ₦900 in cash and got ₦100 as a discount.
However, cash purchases do not go into the purchases ledger control account, because control accounts (like the purchases ledger control account) are used to record credit transactions with suppliers—not cash transactions.
Tunde paid cash to Femi and received a 10% cash discount.
The total value of the goods was ₦1,000, and a 10% discount means Tunde paid ₦900 in cash and got ₦100 as a discount.
However, cash purchases do not go into the purchases ledger control account, because control accounts (like the purchases ledger control account) are used to record credit transactions with suppliers—not cash transactions.