CONTROL ACCOUNTS

Question 1

ACCOUNTS THAT ARE PARTICULARLY IMPORTANT FOR CONTROL PERPESCTIVE:

Answer 1

• RLCA (RECEIVABLE LEDGER CONTROL ACCOUNTS/ SALES LEDGER CONTROL ACCOUNT)
• PLCA (PAYABLE LEDGER OCNTROL ACCOUNT/ PURCHASES LEDGER CONTROL ACCOUNT)
• WAGES (PAYROLL) CONTROL ACCOUNT
• VAT CONTROL ACCOUNT
• BANK ACCOUNT

Question 2

RECEIVABLE LEDGER CONTROL ACCOUNT (RLCA)

Answer 2

RLCA in the General Ledger
- Is the total amount receivable from ALL customers (Debtors)
- RLCA does not show which customers owe money and how much.
- Amounts owed by individual customers are found in the Receivable ledger (Subsidiary ledger)
- CONTROL: check balance on the RLCA (in the General Leger) is equal to total of all customer accounts in the Receivable Ledger.

Question 3

PAYABLE LEDGER CONTROL ACCOUNT (PLCA)

Answer 3

PLCA in the General Ledger.
- Is the total amount payable to ALL suppliers (Creditors)
- PLCA does not show which suppliers are owed money and how much.
- Amounts owed to individual suppliers are found in the Payable ledger (Subsidiary ledger)
- CONTROL: check balance on the PLCA (in the General Leger) is equal to total of all suppliers accounts in the Payable Ledger.

Question 4

WAGES CONTROL ACCOUNT

Answer 4

IS USED TO STORE THE TOTAL OF THE PAYROLL COST.

Question 5

WAGES CONTROL ACCOUNT

Answer 5

• DEBIT (DEBIT WAGES- EXPENSE ACCOUNT)
• CREDIT (CREDIT WAGES - CONTROL ACCOUNT)

Question 6

WAGES CONTROL ACCOUNT (CREDIT)

Answer 6

THE CREDIT THAT IS POSTED TO THE WAGES CONTROL ACCOUNT - REPRESENTS - TOTAL AMOUNT IS PAYABLE.

Question 7

WAGES CONTROL ACCOUNT CREDIT ENTRIES WILL BE MADE IN OTHER ACCOUNTS, SUCH AS:

Answer 7

• BANK (THE NET PAY THAT IS PAID TO THE EMPLOYEES)
• HMRC (TAX –PAYE– AND NATIONAL INSURANCE )
• PENSION (PENSION CONTRIBUTIONS TO THE PENSION SCHEMES)
• TRADE UNION SUBSCRIPTION (SUBSCRIPTIONS COLLECTED OUT OF THE EMPLOYEES PAY THAT MUST BE PAID TO TRADE UNIONS)

Question 8

WAGES CONTROL ACCOUNT = 0

Answer 8

After all the postings have been made , the balance should be 0.
If not , must be investigate, it represents an over or under payment of a liability to an employee, HMRC, Pension scheme, etc…

Question 9

VAT ON SALES

Answer 9

• OUTPUT VAT
• IS THE VAT INCLUDED IN A SALES INVOICE COLLECTED FROM CUSTOMERS THAT BELONGS TO HMRC.
• POSTED AS A CREDIT IN THE VAT CONTROL ACCOUNT

Question 10

VAT ON PURCHASES

Answer 10

• INPUT VAT
• IS THE VAT CHARGED BY THE SUPPLIER
• POSTED AS A DEBIT IN THE VAT CONTROL ACCOUNT

Question 11

OTHER POSTINGS TO VAT CONTROL ACCOUNT…

Answer 11

• VAT ON CREDIT NOTES
• CUSTOMER DEBTS WRITEN OFF AS UNCOLLECTABLE

Question 12

RECONCILE VAT RETURN

Answer 12

BALANCE VAT CONTROL ACCOUNT HAS TO BE EQUAL (RECONCILE) TO VAT RETURN.

IF NOT, THERE’S AN ERROR.