Accounting - Topics - Control for debtors and creditors

Control for debtors and creditors

Control accounts are prepared in the general ledger and are used
where there are a number of subsidiary items involved in business
transactions such as individual debtors, stock or non-current assets and
the business desires to group these items into the one ledger account.

What is the purpose of a control account?

* the control account is summarised information located in the general
ledger. More detailed information is held in the subsidiary ledger

* a control account enables a separation of duties between the
bookkeeping department (or section) responsible for the general ledger and
bookkeeping department (or section) responsible for the subsidiary ledger

* internal control is maintained by checking the balance of the control
account with the total of balances shown in the schedule [2]taken from the
subsidiary ledger

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