Control Accounts Flashcards

1
Q

What goes in the debit of a SLCA

A

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

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2
Q

What goes in the credit of a SLCA

A

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

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3
Q

What goes in the debit of a PLCA

A

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

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4
Q

What goes in the credit of a PLCA

A

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

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5
Q

3 benefits of using control accounts

A
  • 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
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6
Q

Limitations of control accounts

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