Hamir is a trader who maintains full set of accounting records. He divides his ledger into three sections – nominal (general), sales and purchases.

a. State one advantage of dividing the ledger into these sections.

b. State two advantages of maintaining a purchases ledger control account.

Hamir provided the following information for the month of May 20–1:

c. Prepare the purchases ledger control account for the month of May 20–1. Balance the account and bring down the balances on 1 June 20–1.

d. Name the book of prime entry Hamir would use to provide information about:

i. Interest charged by credit supplier
ii. Purchases returns
iii. Discount received.

Transcribed Image Text:

$ May 1 Debit balances in purchases ledger 105 Credit balances in purchases ledger 4 897 May 31 Totals for the month: Credit purchases 5424 Purchases returns 657 Payments to suppliers 4312 Discount received 88 Interest charged by credit supplier June 1 Debit balances in purchases ledger 20 76 %24