Control Accounts

1
Control Accounts

• Reference
• Chapter 27 (p. 338)

2
A Functions of Control A/C

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

3
B 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

Posting
Original documents
7 books
3 ledgers
4
General ledger Sales and Purchases a/c
Sales / Purchases Journals (7 books)
Original documents
Trial Balance
Sales / Purchases ledgers Debtors / Creditors a/c
Double entry system
Sales ledger control account Purchases ledger
control account
For memorandum purposes
posting
extracting
5
C Sales Ledger Control a/c
Sales Ledger Control a/c Sales Ledger Control a/c Sales Ledger Control a/c Sales Ledger Control a/c Sales Ledger Control a/c Sales Ledger Control a/c
2008 2008
Dec 1 Balance b/f (a) Dec 1 Balance b/f (h)
31 Sales (b) 31 Returns inwards (i)
31 Cash / Bank (Refund) (c) 31 Cash / Bank (j)
31 Bank(Dishonoured cheques) (d) 31 Set-off (k)
31 Interest received (e) 31 Discounts allowed (l)
31 31 Bad Debts (m)
31 Balance c/f (g) 31 Balance c/f (n)
X X
6
Items Items Sources
(a) Total of opening debit balances of debtors
(b) Total credit sales
(c) Cash refund to a customer
(d) Dishonoured cheques
(e) Interest charged by us on overdue debts
(f) Bad debts recovered
(g) Total of closing credit balances of debtors
(h) Total of opening credit balances of debtors
(i) Returns inwards
(j) Cash or cheques received from debtors
(k) Balances in sales ledger set off against credit balances in purchases ledger
(l) Discounts allowed
(m) Bad debts written (not provision for bad debts)
(n) Total of closing debt balances of debtors
Sales ledger
Sales journal
Cash book
Cash book
Journal
Journal
Sales ledger
Sales ledger
Returns inwards journal
Cash book
Journal
Cash book
Journal
Sales ledger
7
D Purchases Ledger Control a/c
Purchases Ledger Control a/c Purchases Ledger Control a/c Purchases Ledger Control a/c Purchases Ledger Control a/c Purchases Ledger Control a/c Purchases Ledger Control a/c
2008 2008
Dec 1 Balance b/f (a) Dec 1 Balance b/f (g)
31 Returns outwards (b) 31 Purchases (h)
31 Cash / Bank (c) 31 Cash / Bank (i)
31 Set-off (d) 31 Bank (j)
31 Discounts received (e) 31 Interest expenses (k)
31 Balance c/f (f) 31 Balance c/f (l)
X X
8
Items Items Sources
(a) Total of opening debit balances of creditors
(b) Returns outwards
(c) Cash or cheques paid to creditors
(d) Balances in purchases ledger set off against debit balances in sales 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
Purchases ledger
Returns outwards journal
Cash book
Journal
Cash book
Purchases ledger
Purchases ledger
Purchases journal
Cash book
Cash book
Journal
Purchases ledger