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Control Account

Control Account

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Published by theultimate

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Published by: theultimate on Jan 06, 2009
Copyright:Attribution Non-commercial

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01/24/2014

 
Control Account
A control account is a summary account in the general ledger. The details that support the balance in thesummary account are contained in a subsidiary ledger–a ledger outside of the general ledger.The purpose of the control account is to keep the general ledger free of details, yet have the correct balancefor the financial statements. For example, the Accounts Receivable account in the general ledger could be acontrol account. If it were a control account, the company would merely update the account with a fewamounts, such as total collections for the day, total sales on account for the day, total returns andallowances for the day, etc.The details on each customer and each transaction would not be recorded in the Accounts Receivablecontrol account in the general ledger. Rather, these details of the accounts receivable activity will be in theAccounts Receivable Subsidiary Ledger. This works well because the employees working with the generalledger probably do not need to see the details for every sale or every collection transaction. However, thesales manager and the credit manager will need to know detailed information on individual customers,including whether a customer recently reduced their account balance. The company can provide theseindividuals with access to the Accounts Receivable Subsidiary Ledger and can keep the general ledger freeof a tremendous amount of detail.
Types of control accounts:1.Sales Ledger Control Account (or Total Debtors Account).2.Purchases Ledger Control Account (or Total Creditors Account).Sales Ledger Control Account
$ $Balance b/f (majority)xxxBalance b/f (minority)xxxCredit Sales (total of sales journal)xxxSales returns (total of salesreturns journal)xxxRefunds to credit customers(from cash book)xxxCash/cheques received fromcredit customers (from cashbook)xxxDishonoured cheques (fromcash book)xxxDiscount allowed (total odiscount column from cashbook)xxxInterest charged (from sales journal)xxxBad Debts (from journal)xxxBad Debts recovered (from journal)xxxCash from bad debts recovered(from cash book)xxxBalance c/f (total of creditbalances in sales ledger)xxxSet off – purchase ledger (from journal)xxxBalances c/f (total of debitbalances in sales ledger)xxx
xxxxxxPurchases Ledger Control Account
$ $Balance b/f (minority)xxxBalances b/f (majority)xxxPurchase returns (total opurchase returns journal)xxxCredit purchases (total opurchases journalxxxCash / cheques paid to xxxRefunds from suppliers (from xxx

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Annastazia P Jidamva added this note
COOL
Julius Kitaka added this note
I like the format .
Justo Kapiza added this note
nice format
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Francis Nutsugah added this note
i like the format given, what about solving some practical questions as well?
Zoran Ilic liked this

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