Subsidiary Ledgers

&
Control Accounts
Mr E.P Augustinus
Subsidiary ledger and control a/c
▪ A subsidiary ledger is a sub-account within
the ledger e.g. sales ledger ( sub-ledger:
customer account)
▪ Control accounts ( known as total
accounts) is used to record the totals of
transactions passing through the subsidiary
accounts.
▪ Control accounts are used as master accounts
▪ Two commonly used control accounts are:
Debtors and Creditors control accounts
 Principles of control accounts
▪ Transactions are recorded on the same side of the
control a/c as on the subsidiary accounts
▪ If opening balances for subsidiary a/c is known,
together with total amounts increasing these
balances and total amounts decreasing these
balances, then closing balances for subsidiary can
be calculated. E.g.

Total of opening balance 50,000

Add: increases 10,000
60,000
Less: decreases 12,000
Total of closing balance 48,000
 Sources of information for
control accounts
Debtors ledger control
▪ Opening balances – list of debtors balances on
the previous period.
▪ Credit sales – totals from sales journal
▪ Sales return – total of sales return journal
▪ Cheque and cash received – cash book
▪ Discount allowed – cash book
▪ Bad debts – journal or bad debts written off a/c
▪ Closing balances – list of debtors balances on
the current period
 Sources of information for
control accounts…
Creditors ledger control
▪ Opening balances – list of creditors balances
on the previous period.
▪ Credit purchases – totals from purchases
journal
▪ Purchases return – total of purchases return
journal
▪ Cheque and cash received – cash book
▪ Discount received – cash book
▪ Closing balances – list of creditors balances on
the current period.
 Format: Debtors ledger control
Dr Debtors ledger control Cr
N$ N$

Balances b/d( Large Amount) XX Balances b/d ( Small Amount)

Credit sales XX Cash/cheques received from debtors XX

Returned cheques XX cash discount allowed XX

Interest charged to debtors XX sales returns XX

Bad dedts written off XX

Set-off/ contra entries XX

Balances c/d( Small Amount) XX Balances c/d ( Large Amount) XX

XXX XXX
 Format: Creditors ledger control
Dr Creditors ledger control Cr
N$ N$

Balances b/d ( Small Amount) Balances b/d ( Large Amount) XX

Cash/ cheques paid to creditors XX Credit purchases XX

Cash discount received XX Interest charged to creditors XX

Purchases returns XX

Set off/contra entries XX

Balances c/d( Large Amount) XX Balances c/d ( Small Amount)

XXX XXX
Example 1
Prepare a debtors control account for the
month of Feb 2022 from the following
information:
01 Feb Sales ledger balances $17,491
29 Feb Credit sales for the month $42,591
29 Feb Sales returns $ 1,045
29 Feb Payment received from debtor $39,024
29 Feb Cash discount allowed $ 593
29 Feb Bad debts written off $ 296
Dr
Debtors Ledger Control Account Cr

1-FebBal b/d 17,491.00 29-Feb Sales Return 1,045.00

29-FebSales 42,591.00 29-Feb Payment 39,024.00

29-Feb 29-Feb Discount Allowed 593.00

29-Feb Bad Debts 296.00

29-Feb Bal c/d 19,124.00

60,082.00 60,082.00

1-MarBal b/d 19,124.00

Example 2
Prepare a creditors control account for the
month of Jan 2022 from the following
information:
01 Jan Purchases ledger balances $14,275
31 Jan Credit purchases for the month $36,592
31 Jan Purchases returns $ 653
31 Jan Payment made to creditor $31,074
31 Jan Cash discount received $ 1,048
31Jan Transfer of credit balances to sales ledger $ 296
Dr Creditors Ledger Control Account Cr

31-JanPurchase Returns 653.00 1-JanBal b/d 14,275.00

31-JanPayment 31,074.00 31-JanPurchase 36,592.00

Discount
31-JanReceived 1,048.00

31-Jan Set off-Sales LG 296.00

31-JanBalance c/b 17,796.00

50,867.00 - 50,867.00

1-FebBal c/d 17,796.00

Example 3
The sales ledger of Mr K contains the following accounts on 01
Feb 2021:
Meatma Retailer balance $826.40 debit
New age Cc balance $293.49 debit

The following transaction took place in February:

▪ 3 Feb Sold goods on credit to Meatma Retailer $ 338.59 and
to New age Cc $127.48
▪ 20 Feb Meatma settled an invoice for $826,40 by cheque
after deducting 2.5% cash discount
▪ 24 Feb New age Cc returned goods for $56.29
▪ 28 Feb Transferred the balance of New age Cc’s account to
the company’s purchase ledger
Required:
1. Write up and balance the personal a/c in the sales ledger
2. Prepare the debtors control a/c for the month of February
Dr
Meatma Retailer Cr
1-FebBalance b/d 826.40 20-FebBank 805.74
3-FebSales 338.59 20-FebDiscount Allowed 20.66
20-Feb 28-FebBalance c/d 338.59

1,164.99 - 1,164.99
1-MarBalance c/d 338.59

Dr
New age Cc Cr
1-FebBalance b/d 293.49 24-FebSales Return 56.29
3-FebSales 127.48 28-FebSet-Off Purchase Ledger 364.68

420.97 - 420.97
Dr
Debtors Ledger Control Account Cr

1-FebBalance b/d1,119.89 24-FebSales Return 56.29

28-FebSales 466.07 28-FebBank 805.74

28-FebDiscount Allowed 20.66

28-FebSet-Off /Contra 364.68

28-FebBalance c/d 338.59

1,585.96 - 1,585.96

1-MarBalance b/d 338,59

Practice question
The following accounts appears in the sales ledger
of Mr Shikongo for September 2021:
Dr Ndapewa Cr
01 Sep Bal b/d 60,000 04 Sep Cash Book 30,000
20 Sep Sales Day Book 14,000

Dr Shali Cr
15 Sales Day Book 7,200

Dr S Day Cr
01 Sep Bal b/d 37,500 15 Sep Cash Book 17,500
30 Sep Sales Day Book 10,000
Practice question…
On 30 September, Mr Shikongo discovered the
following:
▪ A payment of $200 from Shali on 25 September had
been omitted from her account
▪ Ndapewa returned goods costing $140 to Mr
Shikongo on 23 September
▪ S Day was entitled to $250 cash discount, which had
been omitted.
Required:
1. Redraft the three ledger accounts, adjusting for the
above items.
2. Prepare the sales ledger control account for
September
DR NDEPEWA CR
1-SepBal b/d 60,000.00 4-SepCashbook 30,000.00
20-Sep Sales 14,000.00 23-SepReturn Inwards 140.00
30-SepBalance c/d 43,860.00
74,000.00 - 74,000.00
1-OctBalance b/d 43,860.00

DR SHALI CR
15-SepSales 7,200.00 25-SepCash/Bank 200.00
30-SepBal c/d 7,000.00
7,200.00 7,200.00
1-OctBalance b/d 7,000.00

DR S DAY CR
1-SepBal b/d 37,500.00 15-SepCashbook 17,500.00
30-SepSales 10,000.00 30-SepDiscount Allowed 250.00
30-SepBal c/d 29,750.00
47,500.00 47,500.00
1-OctBalance b/d 29,750.00
DR Sales Ledger Control Account CR
01-SepBal b/d 97,500.00 30-SepCashbook 47,700.00
30-SepSales 31,200.00 30-SepReturn Inwards 140.00
30-SepDiscount Allowed 250.00
30-SepBal c/b 80,610.00
128,700.00 128,700.00
1-OctBalance b/d 80,610.00
 Summary
Control accounts ( or total accounts) are “master
accounts” which control a number of subsidiary
accounts.
Two commonly used control accounts are:
▪ Debtors ledger control account
▪ Creditors ledger control account
Thanks