Control Account
Control Account
purchases ledger control account: - is an account summarizing all the accounts of the trade payables.
Contra entries: -it may be referred to as inter ledger transfers or set-off s and are when a transfer is
made from an account in the sales ledger to an account of the same business/person in the purchases
ledger.
2) They are proof of the arithmetical accuracy of the ledgers they control.
3) The balances on these accounts are regarded as being equal to the total of the trade
receivables and the total of the trade payables, so this information is available immediately.
4) Draft financial statements can be prepared quickly because of the balances provided by
5) They help to reduce fraud as the control accounts are prepared by someone who has not
6) They provide a summary of the transactions affecting the trade receivables and trade
XXX XXX
Purchase ledger account
Date Details $ Date Details $
1 jan 17 Balance b/d (Dr.) XXX Balance b/d (Cr.) (Normal) XXX
Cash / bank XXX Purchase XXX
Purchase returns XXX Interest on overdue amount XXX
Discount received XXX Refund from supplier
Set off (sales ledger) XXX
XXX XXX
NOTE:-
1)Cash Sale and cash Purchases will not be written in control Accounts.
2)Cash sale and Cash Purchases payment received and paid will not be written in control Account
Q1 You are required to prepare a sales ledger control account from the following information for the
month of November 2014
Debit balances in the sales ledger set off against credit 120
Credit balances 60
Q4 Prepare a sales ledger control account from the following information for October 2016, carrying
down the balance at 31 October 2016
error(s) could be located it was decided to prepare purchases and sales ledger control accounts.
From the following information prepare the control accounts and show where an error may
$
Purchases ledger balances 19,420
Sales ledger balances 28,227
Totals for the year 2015
Purchases journal 210,416
Sales journal 305,824
Returns outwards journal 1,452
Returns inwards journal 3,618
Cheques paid to suppliers 205,419
Petty cash paid to suppliers 62
Cheques and cash received from customers 287,317
Discounts allowed 4,102
Discounts received 1,721
Balances on the sales ledger set off against
balances in the purchase’s ledger 640
Dec 31 The list of balances from the purchase’s ledger shows a total of £20,210
$
Accounts receivable ledger - Dr 46,462
Cr 245
Accounts payable ledger - Dr 1,472
Cr 25,465
Total for the month to 31 January 2017
Purchases 76,474
Sales 126,024
Purchase returns 2,154
Accounts receivable settled by contra accounts
with accounts payable 455
Bad debt written off 1,253
Discounts and allowances to customers 746
Cash received from customers 120,464
Cash discount received 1,942
Cash paid to creditors 70,476
Cash paid to customers 52