Control accounts

Question 1

State the purpose of preparing control accounts.

Answer 1

Main purpose:
To act as an independent check on the accuracy of the trade receivables and trade payables accounts in the sales and purchases ledgers respectively

Other purposes:
· To obtain the total trade receivables balance and total trade payables balance easily
· To deter against fraud

Question 2

State the ledger in which control accounts are kept.

Answer 2

General Ledger

Question 3

State 2 sources of information for the trade receivables control accounts.

Answer 3

1. Sales Journal
2. Sales Returns Journal
3. Cash Book
4. General Journal

Question 4

State 2 sources of information for the trade payables control accounts.

Answer 4

1. Purchases Journal
2. Purchases Returns Journal
3. Cash Book
4. General Journal