control accounts

Slide 1: 

Control Accounts

Control Accounts : 

Control Accounts Also known as Total Accounts. A Control Account acts as the summary of the ledger which it ‘controls’. If the totals of the trial balance fail to agree, it is necessary to check the accounting records. This can be time consuming and errors may be difficult to locate. The task can be easier if sections of the ledger have control accounts.

Slide 3: 

As with a trial balance, a control account only checks the arithmetical accuracy: there are some errors, such as errors of commission, which will not be revealed by a control account. It is usual to prepare a control account for the sales ledger and a control account for the purchases ledger.

Sales Ledger Control Accounts : 

Sales Ledger Control Accounts Sometimes known as a total debtors account. The control account is balanced at the end of the period in the same way as any other ledger account.

Slide 5: 

When the balances on all the individual accounts in the sales ledger are added together they should agree with the balance on the sales ledger control account. If there is a difference then either in the sales ledger or within the control account, so further investigation is required.

Slide 6: 

A Sales ledger control account resembles the account of an individual debtor. It is, however, an account recording, in total, the transactions affecting all the debtors. If there is an error in an error in the sales ledger it will not be revealed by a control account prepared from the individual accounts in that ledger. It is therefore essential that the information required to prepare a sales ledger control account is obtained from books of prime entry.

Purchase Transactions for the month of October 2006 : 

Purchase Transactions for the month of October 2006 Purchased from Varun goods worth $2000 on credit. Purchased from Neha goods worth $5000 and paid cash. Purchased from Jugal goods worth $4000 on credit. Purchased from Gail goods worth $2000 on credit.

Entry of the same in Purchase Journal : 

Entry of the same in Purchase Journal Purchase Journal $ Varun 2000 Jugal 4000 Gail 2000 8000

Further Transactions for the month : 

Further Transactions for the month Returned goods worth $ 200 to Varun. Returned goods worth $100 to Jugal. Made payments by cheque to the following: Varun $1800 Jugal $1000 and Gail $1000

Entry of the same in Purchases Returns Journal : 

Entry of the same in Purchases Returns Journal Purchases Returns Journal $ Varun 200 Jugal 100 300

Entry of the same in Cash Book : 

Entry of the same in Cash Book Cash Book

Purchase Ledger : 

Purchase Ledger

Nominal (general) ledger : 

Nominal (general) ledger

Sales Transactions for the month of October 2006 : 

Sales Transactions for the month of October 2006 Sold goods worth $ 2500 on credit to Vidur. Sold to Riya goods worth $ 5500 and received cheque for the same. Sold to Akruti goods worth $ 4000 on credit. Sold to John goods worth $ 2000 on credit. Sold to Bhavik goods worth $ 2500 and received cheque for the same.

Entry of the same in Sales Journal : 

Entry of the same in Sales Journal Sales Journal $ Vidur 2500 Akruti 4000 John 2000 8500

Further Transactions for the month : 

Further Transactions for the month Vidur Returned goods worth $300. Akruti Returned goods worth $500. Received cheque from the following: Vidhur $2200 Akruti $3500 and John $1000

Entry of the same in Sales Returns Journal : 

Entry of the same in Sales Returns Journal Purchases Returns Journal $ Vidur 300 Akruti 500 800

Entry of the same in Cash Book : 

Entry of the same in Cash Book Cash Book

Sales Ledger : 

Sales Ledger

Nominal (general) ledger : 

Nominal (general) ledger