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Lesson #1 - Sales Ledger Control Account

The document outlines the principles of control systems in accounting, focusing on the Sales Ledger Control Account for Grade 11 students. It details the objectives, types of control systems, and the purpose and construction of control accounts, emphasizing the importance of accuracy and error localization. Additionally, it provides sources of information for the Sales Ledger Control Account and distinguishes between debit and credit entries.

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13 views

Lesson #1 - Sales Ledger Control Account

The document outlines the principles of control systems in accounting, focusing on the Sales Ledger Control Account for Grade 11 students. It details the objectives, types of control systems, and the purpose and construction of control accounts, emphasizing the importance of accuracy and error localization. Additionally, it provides sources of information for the Sales Ledger Control Account and distinguishes between debit and credit entries.

Uploaded by

thats.frm.tas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SUBJECT : PRINCIPLES OF ACCOUNTS

UNIT : Control Systems


SUB- TOPIC : Control Account - Sales Ledger Control Account
GRADE : 11 (Pool 5 & Pool 2)
DATE : February 18 & 20, 2025.
DURATION : 2 x 80 minutes

Objectives:
Students should be able to:
1. Describe the purpose of Control Systems in the accounting process.
2. Identify the three main types of control systems used in accounting process.
3. Explain the purpose of Control Accounts
4. Differentiate between the types of Control Accounts.
5. List the sources of information for the construction of the Sales Ledger Control Account
6. Prepare the Sales Ledger Control Account.

Control accounting systems are the policies and procedures used to ensure accuracy and
reliability across accounting reports to:

 Prevent fraud
 Control risk
 Proactively identify financial issues
 Protect resources (both tangible and intangible) from theft and waste
 Operate efficiently
 Generate timely, reliable reporting
 Measure progress towards business objectives and goals
 Comply with applicable laws and regulations
 Secure outside funding
 Reassure investors

Three common control systems include:

 Suspense Account
 Control Accounts
 Bank Reconciliation Statements

Purpose of Control Accounts

1
 Check the accuracy of postings in the ledger
 Provide easy reference for information
 Localise errors
 Enable the General Ledger to balance

Types of Control Accounts:


 Sales Ledger Control Account/ Debtor’s Control Account/ Total Debtors Account/
Accounts Receivable Control Account
 Purchases Ledger Control Account/ Creditor’s Control Account/ Total Creditors
Account/Accounts Payable Control Account

Sales Ledger Control Account / Accounts Receivable Control Account


This comprises the total of all accounts of a similar nature related to debtors.

Items on the Debit Side of the


Source of Information
Sales Ledger Control Account
Balance b/d Debtors Control Account of the previous period.
Sales (credit sales ONLY) Sales Journal
Dishonoured cheques Cash book
Refunds General Journal
Interest on overdue accounts General Journal
Other transactions that increases the amount General Journal
owing
Items on the Credit Side of the Sales
Source of Information
Ledger Control Account
Cash/ Bank Cash book
Sales returns Sales Returns Journal
Discount allowed Cash book
Bad Debts General Journal
Contra General Journal

N.B.
Any item that INCREASES what the debtor/accounts receivable OWES , make a DEBIT. Any
item that DECREASES what the debtor/accounts receivable owes, make a CREDIT.
See handout for additional information.

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