Control accounts & Subsidiary ledgers Flashcards
What does a sales ledger control account (SLCA) contain?
Total receivables account
Sales invoices posted from the sales day book
Credit notes posted from the sales returns day book
Receipts from customers posted from the cash receipts book
Discounts allowed to customers posted from the cash receipts book
What are the processes involved in posting the sales day book to the general ledger?
At the end of each day/week/month the sales day book is totalled.
The totals are then posted to accounts in the general ledger using the double entry system.
Using the double entry system how would the sales day book be shown in the general ledger?
Debit = Sales ledger control account = Total figure (gross)
Credit = Sales account = net figure Credit = VAT account = VAT amount
Where is information about each individual credit customers balance located?
The sales ledger.
This is a subsidiary ledger, where each entry from the sales day book is entered into the relevant customer account.
Entries into the sales ledger are always…
Inclusive of VAT (gross total)
Entered on the debit side of the account. As this is the amount the receivable owes to the business thus an asset to the business.
Using the double entry system how would the sales returns day book be shown in the general ledger?
Debit = Sales returns account = Net figure Debit = VAT account = VAT total
Credit = Sales ledger control account = Total figure (gross)
How would sales returns be shown on each individual credit customers account?
The gross credit note total would be on the credit side of the individual customers account.
(Decreasing the businesses asset)
What does a purchases ledger control account (PLCA) contain?
Total payables account
Purchase invoices posted from the purchases day book
Credit notes posted from the purchases returns day book
Payments to suppliers posted from cash payments book
Discounts received from suppliers posted from cash payments book.
What are the processes involved in posting the purchases day book to the general ledger?
At the end of each day/week/month the purchases day book is totalled.
The totals are then posted to accounts in the general ledger using the double entry system.
Using the double entry system how would the purchases day book be shown in the general ledger?
Debit = Purchases account = Net figure Debit = VAT account = VAT amount
Credit = Purchases ledger control account = Total figure (gross)
Where is information about each individual credit suppliers balance located?
The purchases ledger.
This is a subsidiary ledger, where each entry from the purchases day book is entered into the relevant supplier account.
Entries into the purchases ledger are always…
Inclusive of VAT (gross total)
Entered on the credit side of the account. As this is the amount the owed to the supplier by the business thus a liability to the business.
Using the double entry system how would the purchases returns day book be shown in the general ledger?
Debit = Purchase ledger control account = Total figure (gross)
Credit = Purchase returns = Net figure Credit = VAT account = VAT amount
How would purchases returns be shown on each individual credit customers account?
The gross credit note total would be on the debit side of the individual suppliers account.
(Reducing the businesses liability)
