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CH 13 Control Accounts

Control accounts enable totals for trade payables and receivables to be quickly extracted for financial statements. They are kept separately from ledgers to reduce errors and fraud, and improve reliability by identifying errors between ledger and account totals. The control account can also help identify problems in a particular ledger if a trial balance does not balance.

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Sumiya Yousef
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36 views12 pages

CH 13 Control Accounts

Control accounts enable totals for trade payables and receivables to be quickly extracted for financial statements. They are kept separately from ledgers to reduce errors and fraud, and improve reliability by identifying errors between ledger and account totals. The control account can also help identify problems in a particular ledger if a trial balance does not balance.

Uploaded by

Sumiya Yousef
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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CH 13 CONTROL ACCOUNTS

5B 8C
They enable totals for trade payables and trade receivables to be quickly extracted (1) for the
trial balance and financial statements (1)
They are kept in the general ledger separately from the ledgers themselves / segregation of
duties (1) thereby reducing the risk of errors / fraud (1)
They improve the reliability of the ledgers (1) by identifying errors when ledger totals do not
agree with the control account totals (1)
The control account may help to identify problems in a particular ledger (1) If a trial balance
does not balance (1).
5 marks
9706/12/F/M/19

6B 7D 8A
9706/12/F/M/20

6 A sales ledger control account included the following entries.


1 contra with the purchases ledger control account $500, debit
2 discount allowed $600, debit
3 irrecoverable debts written off $1200, debit

Which entries must be corrected?


A 1 and 2 only B 1 and 3 only C 1, 2 and 3 D 2 and 3 only
6C

9706/22/F/M/20

 They provide a check on the arithmetical accuracy of the balances on the sales
and purchases ledger/helps in locating errors (1). The balance on the control
account should equal the total of the individual balances (1).
 Prevents fraud (1). Division of duties – different person working on the control
account to the sales and purchases ledger (1).
 Helps in preparation of financial statements (1). Speedier as total entered in trial
balance rather than individual balances (1).
[9]
9706/12/M/J/19

6A

9706/11/M/J/19

6C
8C
9706/12/F/M/20

6C

5 D
9706/21/M/J/19

[4]

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