Subject: Principles of Accounts
Topic: Control Accounts
Control Account: An account that checks the arithmetical accuracy of a ledger.
Two types of Control Accounts are:
1. Sales Ledger Control A/c (Total debtors A/c)
2. Purchases Ledger Control A/c (Total creditors A/c)
Advantages of maintaining Control Accounts:
1. To locate errors
2. To prevent fraud
3. To calculate total debtors and creditors
Sometimes the sales ledger control account may have both a debit and a credit opening balance
because the debit balance represent those customers who still owe the business whereas the credit
balance represent those customers that overpaid their account.
Dishonored Cheques- these are cheques the bank refuse to cash. This can be due to one or more of the
following reasons:
a. insufficient funds
b. the cheque is stale-dated
c. the cheque is post-dated
d. irregular signature
e. cheque is incomplete
f. words and figure differ
Tips when making entry to Sales Ledger Control A/c:
Think of it the same way you would think of the Debtors a/c. Therefore, any transaction that would
cause your Debtors/Receivable figures to increase is entered on the debit side.. Indicating monies
owed to the business. On the other hand, any transaction that would decrease what is owed to the
business is entered on the credit side of the Sales Ledger Control A/C.
Tips when making entry to Purchases Ledger Control A/c:
Think of it the same way you would think of the Creditors a/c. Therefore, any transaction that would
cause your Creditors/Payables figures to increase is entered on the credit side.. Indicating monies the
business owe to its suppliers. On the other hand, any transaction that would decrease what the
business owe is entered on the debit side of the Purchases Ledger Control A/C.
Sales Ledger Control A/C
Opening Balance b/d xxx Opening balance b/d xxx
Credit Sales xxx Cash received from customers xxx
Cash Refund xxx Cheques received (bank) xxx
Dishonored Cheques xxx Discount Allowed xxx
Interest on overdue a/c xxx Return Inwards xxx
Credit closing balance xxx Bad Debts Written off xxx
Set off against Purchases Ledger xxx
Debit closing balance xxx
xxx xxx
Opening debit balance b/d xxx opening credit balance b/d xxx
Purchases Ledger Control A/C
Opening Balance b/d xxx opening credit balance b/d xxx
Return Outwards xxx credit purchases xxx
Discount Received xxx closing debit balance c/d xxx
Cash paid to suppliers xxx
cheques paid to
suppliers xxx
set off against sales
ledger xxx
closing credit balance
c/d xxx
xxx xxx
Opening debit opening credit
balance b/d xxx balance b/d xxx
