Question

Credit purchase, during the year is ascertained by preparing ________.

• A. Total creditor's account
• B. Total debtor's account
• C. Cash account
• D. Opening statement of affairs

Answer 1

The correct option is A Total creditor's account


Creditor's account is prepared to record the transaction of payment made to the supplier against the credit purchases and discount allowed by them. Credit purchases are recorded by debiting the purchases account and crediting the creditors account. Creditors account can be presented as:

Particulars	Amount	Particulars	Amount
To Cash/Bank		By Opening Balance B/f
To Discount		By Credit Purchases
To Closing Balance c/d
	xxxx		xxxx