Credit Balance in
Purchases Ledger?

Q: I was solving an exercise of control accounts in which one of the transactions given was this:

Credit balance in purchases ledger transferred from sales ledger. The amount was 810.

So I am confused whether it is a contra entry or what? Please explain.

A:
I would have to see the full question or exercise to see exactly what it was asking for. But I will give you my best idea without seeing the full question/exercise.

This is probably an exercise where you have to do journal entries. For the transaction above I don't think this is a contra entry. I think it's an error and that you now have to do a correcting entry. The correction would be to transfer the credit balance that is incorrectly in the purchases ledger back to the sales ledger (where it belongs).

The journal entry for this would be:

Dr Purchases 810
Cr Sales 810


Anyone else see a question like this or can try answer this? Leave us your comments below.

Best,

Comments for Credit Balance in
Purchases Ledger?

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Debit balances in creditors ledger control account
by: Anonymous

Why does a creditors ledger control account sometimes have a debit balances (reasons)?

Rise of a Credit Balance in the Control Account
by: Allan Gee

A credit balance in the control account may be due to an overpayment by our business to our supplier.

Answer
by: Anonymous

It is a set off.
Dr purchases 810
Cr sales 810

Sales ledger control account, purchase ledger control account and statement of financial position
by: Anonymous

To prepare sales ledger control account and purchases ledger control account and statement of financial position:

1-credit balance on purchase ledger transferred to sale ledger ...amount 998
2- soliciters fee for debit collection. This is charged to customer's account ...amount 550
3- motor vehicle accepted as payment of customer's account ...amount 3500

Good post
by: Ceasar Block

Hello! Your site is awesome!

i didn't get answer for the question
by: yeboah

i didn't get answer for the question that was asked saying that" i was solving question and i came across debit balance transfer from the creditor to the debtor ledger"

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