Topic Seven. Control Accounts. Learning outcomes. After the end of this lesson, you should be in a position to, Describe control accounts Explain the importance of control accounts Draw sales control account Draw purchases control account
See the next slide for an illustration of a sales control ledger
- Accountants in charge of the control account should not have an input in the purchase day books, purchase returns and other books of original entries relating to purchases
- Reconciliations between the control account and subsidiary accounts should be done on a regular basis
- Balances in these accounts are transferred to the trial balance
- Balances in the control accounts are used to provide a control check over the subsidiary account. In this case balances in the subsidiary accounts are transferred to the genera ledger
Having well maintained control accounts will help not only to identify errors, but also deter frauds.