Control Accounts Flashcards
What are the 6 types of ledger control accounts?
- receivables
- payables
- cash/bank
- petty cash
- VAT
- wages
What is a contra?
-where a customer is also a supplier
-the lower of the 2 amounts that are owed will be ‘offset’
Where are contras posted?
-always posted on payments side of the account
-Cr in receivables
-Dr in payables
Is the RCLA part of double entry?
-yes
Is the subsidiary ledger part of double entry?
-no
What must both accounts be updated with?
-sales daybook
-sales return
-cash book
-discounts allowed
What happens if balances in RCLA and subsidiary don’t balance?
need to correct errors in:
-control account
-individual sales ledger
What are some errors affecting RCLA?
-book of prime entry has been undercast or overcast
-postings have been made to wrong side of RCLA
-entry made in receivables but not in RCLA
-incorrect amount posted to RCLA
What are some errors affecting the receivables ledger?
-entry from book of prime entry has not been posted to receivables
-posted to wrong side
-incorrect amount
-balance incorrectly casted
What is output tax?
-VAT on sales
What is input tax?
-VAT on purchases
What does it mean if the balance b/d is on the Dr side of VAT control?
-money payable by HMRC
What does it mean if balance b/d is on the Cr side of VAT control?
-money owed to HMRC
What things would be recorded on the Dr side of receivables?
- Invoices
- Balance b/f
- Dishonoured cheques
What things would be recorded on the Dr side of payables?
- Credit notes
- Payments
- Balance c/d
What Books of prime entry VAT totals would be recorded on Cr side of VAT CA?
- sales daybook
- purchases return daybook
- cash receipts book
Dr or Cr sales daybook VAT?
Cr
Do we Dr or Cr purchase daybook VAT?
Dr
Dr or Cr cash book receipts VAT?
Cr
Dr or Cr petty cash payments VAT?
Dr
Dr or Cr bad debt write off VAT?
Dr
Dr or Cr discounts allowed VAT?
Dr
Dr or Cr discounts received VAT?
Cr
Discounts received double entry
Dr payables
Cr discounts rec
Cr VAT
Discounts allowed double entry
Cr receivables
Dr disc all
Dr VAT
What are 2 reasons for maintaining a RLCA?
-see total amount owed to us by credit customers
-see individual amounts owed to us by individual credit customers as a reconciliation
What are 2 reasons for maintaining a PLCA?
-to show total amount we owe to our credit suppliers
-to show individual amounts that we owe to individual credit suppliers
Where are control accounts usually used?
- Payables
- Receivables
- VAT
