Control accounts Flashcards
1
Q
Definition of control accounts
A
Is a ‘’ Master ‘’ account which are part of the verification process of the double entry records. They control a number of ledger accounts eg.
Sales ledger control account- the total of the trade receivables
Purchases ledger control account - the total of the trade payables
2
Q
Definition of Transactions
A
Transactions are recorded on the same side of the control account as on the subsidiary accounts.
3
Q
What is Set-Off/Contra Entries
A
This occurs when the same person or business has an account in both the sales ledger and purchase ledger, ie. they are both buying from and selling to the business whose accounts we are preparing for.
