PRC-1 · Chapter 3 · Question 35 of 100
'Nexus Traders' makes a bank transfer of Rs. 35,000 to settle an invoice from a credit supplier, 'Vertex Supplies'. How is this specific, individual payment posted from the cash book to the ledgers?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It is debited to the individual account of 'Vertex Supplies' in the Payables Ledger.
Explanation
Individual payments to suppliers decrease the liability owed to that specific supplier. Therefore, the payment is posted from the cash book directly to the debit side of the supplier's personal account in the Payables (Purchase) Ledger.
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