Control Accounts

Reference: Chapter 27 (p. 338)

Functions of Control A/C

Locate errors; Provide a summary of the total of debtors and creditors; Cross-check to avoid fraud.

Revision
Books of original entries and Ledgers 7 books: Sales journal, Purchases journal, Returns inwards journal, Returns outwards journal, Cash book, Petty cash book, Journal 3 ledgers: Sales ledger, Purchases ledger, General ledger

Original documents

7 books

Posting

3 ledgers

Original documents

Sales / Purchases Journals (7 books)

General ledger Sales and Purchases a/c

Sales / Purchases ledgers Debtors / Creditors a/c Trial Balance

Double entry system

Sales ledger control account Purchases ledger control account

For memorandum purposes

posting

extracting

C
2008

Sales Ledger Control a/c

Sales Ledger Control a/c $ (b) (c) (e) 2008 31 Returns inwards 31 Cash / Bank 31 Set-off 31 Discounts allowed $ (h) (i) (j) (k) (l) (a) Dec 1 Balance b/f

Dec 1 Balance b/f 31 Sales 31 Cash / Bank (Refund) 31 Interest received

31 Bank(Dishonoured cheques) (d)

31 Bad debts recovered

31 Balance c/f

(f)
(g) X

31 Bad Debts
31 Balance c/f

(m)
(n) X

Items

Sources

(a)
(c) (e) (f)

Total of opening debit balances of debtors

Cash refund to a customer Interest charged by us on overdue debts Bad debts recovered

(b) Total credit sales (d) Dishonoured cheques

(g) Total of closing credit balances of debtors (h) Total of opening credit balances of debtors (i) (j) Returns inwards Cash or cheques received from debtors

Sales ledger Sales journal Cash book Cash book Journal Journal Sales ledger Sales ledger
Returns inwards journal

Cash book

(k)
(l)

Balances in sales ledger set off against credit balances in purchases ledger
Discounts allowed

Journal
Cash book Journal Sales ledger

(m) Bad debts written (not provision for bad debts) (n) Total of closing debt balances of debtors

D Purchases Ledger Control a/c

Purchases Ledger Control a/c 2008 Dec 1 Balance b/f 31 Returns outwards 31 Cash / Bank 31 Set-off 31 Discounts received $ (b) (c) (d) (e) 2008 31 Purchases 31 Cash / Bank 31 Bank 31 Interest expenses $ (g) (h) (i) (j) (k) (a) Dec 1 Balance b/f

31 Balance c/f

(f)
X

31 Balance c/f

(l)
X

Items (a) Total of opening debit balances of creditors (b) Returns outwards

Sources

Purchases ledger
Returns outwards journal

(c) Cash or cheques paid to creditors

(d) Balances in purchases ledger set off against debit balances in sales ledger

Cash book Journal Cash book Purchases ledger Purchases ledger Purchases journal Cash book Cash book Journal Purchases ledger

(e) Discounts received

(f) Total of closing credit balances of creditors (g) Total of opening credit balances of creditors (h) Total credit purchases (i) Cash refund from suppliers who have overcharged us

(j) Dishonoured cheques returned from creditors

(k) Interest payable on overdue debts (l) Total of closing debt balances of creditors