Chapter 14 - Control account reconciliations

Question 1

What are control accounts?

Answer 1

nominal or general ledger accounts that summarise a large number of transactions

Question 2

Are control accounts part of the doubleentry system?

Answer 2

Yes

Question 3

What do control accounts help?

Answer 3

Reduce the volume of transactions recorded within the nominal or general ledger

Question 4

What are the individual accounts known as?

Answer 4

Trade receivable ledger and trade payables ledger

Question 5

what does the balance on the trade payables or receivable control account equal?

Answer 5

The total of all the individual balances on the trade receivables or payables

Question 6

What is on the debit side of a TRLC t-account?

Answer 6

Balance b/d
Credit sales per SDB

Question 7

What is on the credit side of a TRLC t-account?

Answer 7

Sales returns
Cash received
COntra with PLCA per journal
Irrecoverable debts
Balance c/d

Question 8

What are the 4 steps in identifying errors in control account reconciliation?

Answer 8

1) balance the control account in the GL
2) Total the individual balances in the subsidiary ledger
3) compare the two totals to ensure that they agree
4) if the totals do not agree, then the differences must be investigated and corrected

Question 9

Performing reconciliation of individual supplier statement account balance with payable ledger account balance ensures what?

Answer 9

liabilities are fairly stated
liabilities are paid when due