The Purchase Ledger Records Transactions with Individual Suppliers of Goods

question 32

Essay

The purchase ledger records transactions with individual suppliers of goods and services. Are the transactions listed below debits or credits in each individual supplier's purchase ledger account?
A) Credit notes = Debit
B) Purchase invoices = Credit
C) Discounts received = Debit
D) Cash refunds = Credit

• A) Credit notes = Debit
• B) Purchase invoices = Credit
• C) Discounts received = Debit
• D) Cash refunds = Credit

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Definitions:

Variable Overhead Efficiency Variance

is the difference between the actual variable overhead incurred and the standard cost allocated, based on the efficiency of utilizing resources.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead and what the variable overhead costs should have been for the actual good units produced.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected amount, which can indicate efficiency or waste.

Materials Price Variance

The difference between the actual cost of materials purchased and the expected cost, based on standard prices.