EVERGREEN EDUCATION SCHOOL

EDEXCEL O LEVEL ACCOUNTING

TOPIC- CONTROL ACCOUNTS

Control Account: It is a checking device. It checks the arithmetical accuracy of the ledger
accounts in sales and purchase ledger.
Advantages of control accounts:

 It checks the arithmetical accuracy of ledger accounts.

 It helps to prevent fraud.
 It helps to find out the total closing trade receivables and trade payables.
 It helps in the preparation of financial statements.
 It facilitates the detection and correction of errors.
Disadvantages of control accounts:

 It does not show the location of errors.

 It does not ensure that fraud will not take place in the future.
 It requires special skilled staff and for that, the cost may arise.
Format:
Trade Receivables Control Account

Date Details Amount Date Details Amount

2021 2021
Jan 1 Balance b/d xx Jan 1 Balance b/d xx
Dec 31 Sales day book (?) xx Dec 31 Cashbook (Received from xx
trade receivables)
Dec 31 Cashbook (dishonoured xx Dec 31 Discount Allowed xx
cheque)
Dec 31 Cashbook (Refund to xx Dec 31 Return Inward book xx
customers)
Dec 31 Journal (Irrecoverable xx
debt)
Dec 31 Balance c/d (credit balance) xx Dec 31 Journal (Set off – Trade xx
Payables control account)
Dec 31 Balance c/d (?) xx
2022 xxx 2022 xxx
Jan 1 Balance b/d xx Jan 1 Balance b/d xx

Trade Payables Control Account

Date Details Amount Date Details Amount

2021 2021
Jan 1 Balance b/d (debit balance) xx Jan 1 Balance b/d xx
Dec 31 Cashbook (payment to xx Dec 31 Purchase daybook (?) xx
trade payables)
Dec 31 Discount Received xx Dec 31 Cashbook (refund from xx
suppliers)
Dec 31 Return outward book xx
Dec 31 Journal (Set off- Trade xx
receivable control account)

Dec 31 Balance c/d (?) xx Dec 31 Balance c/d (debit Balance) xx

2022 xxx 2022 xxx
Jan 1 Balance b/d (debit Balance) xx Jan 1 Balance b/d xx