Control Accounts

Question 1

Define sales ledger control account

Answer 1

Account summarising all the accounts of the trade receivables (debtors)

Question 2

Define purchases ledger control account

Answer 2

Account summarising all the accounts of the trade payables (creditors)

Question 3

What are the 5 advantages of having a control account?

Answer 3

Can assist in locating errors when the trial balance does not balance
Proof of arithmetical errors
Draft financial statements can be prepared
Assist in reducing fraud
Provides a summary of the trade payables/receivables for each financial period