1. Definition and Strategic Purpose of the PLCA
The Purchase Ledger Control Account (PLCA)—often called the Accounts Payable Control Account—is a summary account held in the General Ledger. It tracks the total amount of money the business owes to all credit suppliers combined.
2. Standard PLCA Data Flow and Entry Rules
The PLCA tracks credit liabilities using monthly totals from your purchase and cash payment journals:
                      Purchase Ledger Control Account (GL)
=============================================================================
Dr. (Decreases Liability)                   | Cr. (Increases Liability)
--------------------------------------------+--------------------------------
Cash Paid to Suppliers                      | Opening Credit Balance b/d
Discounts Received from Suppliers           | Total Credit Purchases (Purchases Journal)
Purchase Returns & Debit Notes              | Interest Charged by Suppliers on Late Pay

3. Contra Settlements Between SLCA and PLCA
Sometimes, a business acts as both a supplier and a customer to the same company. Instead of writing two separate checks, the two businesses agree to cancel out what they owe each other using a Contra Settlement.
  • The Entry: To record this offset, debit the Purchase Ledger Control Account (reducing your liability) and credit the Sales Ledger Control Account (reducing your asset) for the smaller of the two balances.

 
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