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Control Accounts Notes: How It Works Is
Control Accounts Notes: How It Works Is
The two totals should agree but for the Leaving Cert, the do not. You are
given a list of errors and asked to correct the control or list or both.
Before starting to read the question, layout the 2 blank solution documents, eg
here Debtors Control and a List of Debtors. and input the balances given.
Less
Corrected Total
NB. There is a debit and credit balance. Odd? I thought Debtors should only
have Debit balances? The credit balance represents a Debtor to whom we owe
a refund, so we owe him, he doesn’t owe us. If the question says nothing
about us paying the refund, then that balance will still be in place at the end
of the question like this:
Less
Bal cd 10
Like suspense, you must know what should have been done to be able to
correct the mistake. The questions you must ask your self are:
1. Does the error affect the Personal Account, the Control account, or
both? If you are not sure ask yourself if this means that the Mrs Smith
a/c is wrong or the other a/c (eg Sales, Sales, Returns, Cash, etc)
2. To fix the error in either the Control or the Personal a/c do I need to
increase or decrease. To increase the List, you Add (simple eh!!!), and
to increase or decrease the Control, use the BookKeeping Key from
Suspense.
Examples:
Sales Daybook over totted (added up too much) by €120
A Debtors receipt was entered as €800 not €80 in the Personal
account
Goods returned €75 were entered in the Sales Day Book as €85
and as €7 on the Debit in the Personal a/s