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    CONTROL ACCOUNT Notes

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    ndumiso
    Control accounts act as a summary of transactions recorded in the sales and purchases ledgers. There are two main control accounts: 1) the sales ledger control account which summarizes all transactions involving debtors, and 2) the purchases ledger control account which summarizes transactions involving creditors. Both control accounts have debit and credit sides and help locate errors, check accuracy, and provide balances of total debtors and creditors.

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    CONTROL ACCOUNT Notes

    Uploaded by

    ndumiso
    2K views2 pages
    Control accounts act as a summary of transactions recorded in the sales and purchases ledgers. There are two main control accounts: 1) the sales ledger control account which summarizes all transactions involving debtors, and 2) the purchases ledger control account which summarizes transactions involving creditors. Both control accounts have debit and credit sides and help locate errors, check accuracy, and provide balances of total debtors and creditors.

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    CONTROL ACCOUNT notes

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    Control accounts act as a summary of transactions recorded in the sales and purchases ledgers. There are two main control accounts: 1) the sales ledger control account which summarizes all transactions involving debtors, and 2) the purchases ledger control account which summarizes transactions involving creditors. Both control accounts have debit and credit sides and help locate errors, check accuracy, and provide balances of total debtors and creditors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views2 pages

    CONTROL ACCOUNT Notes

    Uploaded by

    ndumiso
    Control accounts act as a summary of transactions recorded in the sales and purchases ledgers. There are two main control accounts: 1) the sales ledger control account which summarizes all transactions involving debtors, and 2) the purchases ledger control account which summarizes transactions involving creditors. Both control accounts have debit and credit sides and help locate errors, check accuracy, and provide balances of total debtors and creditors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    CONTROL ACCOUNT

    Control accounts are sometimes known as total accounts. A control account act as a
    summary of the ledger which it controls. There are two control accounts.
    1. Sales ledger control account / Total debtors account
    2. Purchases ledger control account / Total creditors account.

    1. Sales Ledger Control Account: It resembles the account of an individual debtor. It is


    an account recording in total the transactions affecting all the debtors.
    Sources Of Information for Sales Ledger Control Account:
     Sales Sales Book
     Cash and Cheques received Cash Book
     Dishonoured Cheques Cash Book
     Discount allowed Cash Book
     Bad debts Journal
    2. Purchases Ledger Control Account: It resembles the account of an individual
    creditor. It records the transactions effecting all the creditors.
    Sources Of Information For This Account:
     Purchases Purchase Book
     Purchases Returns Purchase Returns Book
     Cash and cheque paid Cash Book
     Discount received Cash Book
     Cash refunds from creditors Cash Book
    Note:
     Cash sales / purchases are not recorded in the ledger control account
     Provision for doubtful debts don’t feature in sales ledger control account because
    the provision accounts are kept in the general ledger not the sales ledger.
     Bad debts recovered are not recorded in sales ledger control accounts.
     Contra (inter- ledger transfer) or “set off” it’s a double entry which may arise
    when we have one person who is trade receivable ( debtor) and trade payable
    ( creditor ) at the same time ,so we off set S.L.C.A credit against P.L.C.A debit
    by the same amount
    Advantages Of Control Account:
    1. It helps in locating errors.
    2. It helps in checking the arithmetical accuracy of the ledger it controls.
    3. It gives us readymade figures for Total debtors and Total creditors on a certain
    date.
    4. Fraud is made more difficult by the use of control account
    Form of control accounts:
    Sales Ledger Control Account
    Debit side Credit side
     Total of sales ledger debit balances  Total of sales ledger credit balances
    brought forward from previous period brought forward from previous period
    (b/d)  Sales returns for period
     Credit sales for period  Cash received from trade receivables
     Refunds to customers (cash book)  Cash discount allowed.(cash book)
     Dishonoured cheques cash book)  Bad debts written off. (journal)
     Interest charged to customers on  Sales ledger balances in purchases
    overdue accounts. (journal) ledger “ contra” (journal)
     Total any sales ledger credit  Total any sales ledger debit balances
    balances at end of period carried at end of period carried forward
    forward.

    Purchases Ledger Control Account


    Debit side Credit side
     Total of Purchases ledger debit  Total of Purchases ledger credit
    balances (if any) brought forward balances brought forward from
    from previous period previous period
     Total of goods returns to suppliers  Total Credit purchases for period
     Total cash paid to suppliers.  Refunds from suppliers (cash book)
     Cash discount received (cash book)  Interest charged by suppliers on
     Purchase ledger balances off set overdue invoices
    against balances in sales ledger  Total of debit balances if any at end
    “contra” (journal) of period carried forward.
     Total of credit balances at end of
    period carried forward

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