Control Accounts

Question 1

What goes in the debit of a SLCA

Answer 1

-balance b/d
-credit sales
-returned / dishonoured cheques
-interest charges to trade receivables

Question 2

What goes in the credit of a SLCA

Answer 2

-cash/ cheques received
- cash discount allowed
-sales returns
-irrecoverable debt written off
-set off/ contra entry
-bal c/d

Question 3

What goes in the debit of a PLCA

Answer 3

-cash/ cheque paid
-cash discount received
-purchase returns
-set off/ contra entry
-bal c/d
- bank - drawings

Question 4

What goes in the credit of a PLCA

Answer 4

-bal b/d
-credit purchases
-interest charged by trade payables
- dishonoured cheque

Question 5

3 benefits of using control accounts

Answer 5

• gives immediate, up-to-date info on the total of trade receivables to trade payables
• makes fraud more difficult (extra layer of security)
• can help locate errors

Question 6

Limitations of control accounts

Answer 6

• cannot reveal all errors such as errors of omission, commission, compensation errors etc