WAEC Accounting 2018 Paper

Concept:A purchase ledger control account normally has a credit balance because the business owes its suppliers.A debit balance, however, means the business has paid more than the amount of purchases made on credit.Explanation:The purchase ledger control account is credited when goods are bought on credit from suppliers.It is debited when payments are made to suppliers or goods are returned to them.A credit balance shows the amount owed to trade creditors.A debit balance of $\mathrm{N}420$ shows that payments made to trade creditors exceeded the purchases on credit by $\mathrm{N}420$.So the trade creditors have been paid $\mathrm{N}420$ in excess, meaning an advance payment of $\mathrm{N}420$ was made to them.This is not a liability; it represents money recoverable from the suppliers.Therefore, the correct interpretation is that trade creditors have been paid by $\mathrm{N}420$.Answer:A. trade creditors have been paid by $\mathrm{N}420$