Section 6 of 8
Control accounts (also called total accounts) are summary accounts in the general ledger that verify the accuracy of the sales ledger and purchases ledger. They are a memorandum check — they do NOT form part of the double entry system.
The SLCA summarises all trade receivables — the total amount owed to the business by credit customers.
| DR | CR |
|---|---|
| Opening debtors balance b/d | Opening credit balance b/d (customers in credit) |
| Credit sales (from SDB total) | Receipts from customers (cash book total) |
| Dishonoured cheques (customer's cheque bounced) | Sales returns (from SRDB total) |
| Interest charged on overdue accounts | Irrecoverable debts written off |
| Refunds to customers (overpayments returned) | Discounts allowed (from cash book discount column total) |
| Contra / set-off with PLCA | |
| Closing bal c/d |
The closing DR balance = total trade receivables for the statement of financial position.
The PLCA summarises all trade payables — the total amount owed by the business to credit suppliers.
| DR | CR |
|---|---|
| Opening debit balance b/d (suppliers owed refunds) | Opening creditors balance b/d |
| Payments to suppliers (cash book total) | Credit purchases (from PDB total) |
| Purchase returns (from PRDB total) | Dishonoured cheques paid (supplier's cheque bounced) |
| Discounts received (from cash book discount column total) | Interest charged by suppliers on overdue accounts |
| Contra / set-off with SLCA | Refunds from suppliers |
| Closing bal c/d |
The closing CR balance = total trade payables for the statement of financial position.
A contra (set-off) occurs when the same business is both a customer and a supplier. Rather than both parties paying each other, the smaller amount is cancelled against both balances.
| Item | Reason |
|---|---|
| Cash sales / cash purchases | Control accounts only cover credit transactions |
| Trade discounts | Deducted before the invoice is raised — never enter the ledger |
| Provision for doubtful debts | An estimate on the SFP — does not affect individual customer balances |
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