Control Accounts are general ledger accounts containing summary of all debtors and creditors balances. Entries in control accounts are the totals of the books of first entry/subsidiary books i.e. sales book, purchases book, returns books, cash book and general journal.

The purpose of control Accounts

  • To act as a check on the accuracy of the totals of the accounts in the sales and purchases ledgers.
  • To provide totals of debtors and creditors quickly.
  • Help to locate errors faster when sides of a trial balance fail to agree.
  • to act as an internal check on the work of accounting clerks – to detect errors and deter fraud.

 

Key Points

    • Control accounts are considered as total accounts.
    • Debtors ledger control account is also known as sales ledger control account or total debtors account.
    • Creditor’s ledger control account is also known as purchases ledger control account or total creditors account.
    • Balance in sales ledger control account is the balance of debtors at the year end and balance in purchases ledger control account is balance of creditors.
    • Cash sales and cash purchases are not recorded in the control accounts.
    • The double entry to record set off from purchase ledger to sales ledger is to debit purchase ledger control account and credit sales ledger control account.
    • Dishonoured cheque which was received from debtors is shown in the debit side of the sales ledger control account.
    • Interest on overdue accounts charged from customers and refunds to customers for overpayments by them are shown on the debit side of sales ledger control account.
    • Interest charged by suppliers and refunds received from suppliers for overpayments to them are recorded in the credit side of purchases ledger control account.
    • Provision for bad debts is not included in sales ledger control account
    • Small balance in a control account represents advance payments, overpayments etc.

From where do you get information to draw Debtors Control Accounts?

Information Source
Total Opening Balance Trial Balance at close of previous period
Total Sales Sales Journal
Dishonoured Cheques Cash Book
Discount allowed withdrawn General Journal
Any charges to debtors General Journal
Total cash and cheques received from debtors Cash book
Discount allowed Cash Book
Returns inwards and allowances Returns Inwards journal
Bad Debts General Journal

 

Format of Debtors’/Sales Ledger Control Account

download (2)

From where do you get information to draw Creditors Control Accounts?

Information Sources
Total cash and cheques paid to creditors Cash Book
Discount received Cash Book
Returns outwards and allowances Returns Outwards Journals
Total opening balances Trial Balance at close of previous period
Total purchases Purchases Journal
Any charges by creditors Journal

 

Format of  Creditors’/Purchases Ledger Control Account

.download (3)

 

Control Account Questions:

Q1.The following balances have been extracted from the books of a business on 31 may 2006 Prepare the Sales Ledger control account

  Opening Creditors
Opening Debtors 6 000
Receipts from debtors 11 400
Discounts allowed 600
Returns Inwards 500
Bad debts written off 500
Set off from purchase ledger 1 000
Credit sales of goods 15 000
Credit balances on 31 May 2006 200
Dishonored cheques 100
Interest charged from debtors 100
Cash refunds to customers 50

 

 

Q2.The following balances have been extracted from the books of a business on 31 may 2006 Prepare the Sales Ledger control account

  $   
Opening Debtors   10 000
Receipts from debtors 21 500
Discounts allowed 500
Returns Inwards 300
Bad debts written off 100
Set off from purchase ledger   800
Credit sales of goods 25 000
Credit balances on 31 May 2006 300
Dishonored cheques   1000
Interest charged from debtors 200
Cash refunds to customers 100

 

Q3.  The following balances have been extracted from the books of a business that uses control accounts. The business makes up the control accounts on 31 may 2006.Prepare the Purchases Ledger Control Account

 

    $
 Opening Creditors  4 000
 Payments to creditors   7 600
 Discounts received 400
 Purchases returns 500
 Set off from Sales Ledger   1 000
 Interest charged by suppliers 200
 Cash refunds from suppliers 100
 Credit Purchases   12 000

 

Q4.The following balances have been extracted from the books of a business that uses control accounts. The business makes up the control accounts on 31 may 2006. Prepare the Purchases Ledger Control Account

 

  $
Opening Creditors   6 000
Payments to creditors   10 400
Discounts received 600
Purchases returns 750
Set off from Sales Ledger 1 500
Interest charged by suppliers 300
Cash refunds from suppliers 150
Credit Purchases    18 000

Q5.       The following details are available from the books of Weston for the month of May, 2003.Prepare Sales ledger control account and Purchases ledger control account.   

        

  $
Opening debtors 4 000
Opening creditors   3 800
Cash received from debtors 8 000
Cheques received from debtors 60 000
Cheques paid to creditors 55 000
Cash paid to creditors 7 000
Bad debts written off during the year 750
Discount allowed   1 250
Discount received 1 000
Returns inwards 800
Returns outwards 500
Transfer from purchases ledger to sales ledger 500
Credit sales   80 000
Credit purchases 71 000
   

 

 

Q6.       From the following information prepare the sales ledger control account and purchases ledger control account.

  $
Opening debtors   12 000
Opening creditors 8 000
Credit sales 30 000
Credit purchases 25 000
Returns inwards 500
Returns outwards 800
Discounts allowed 1 000
Discounts received 300
Bad debts written off 200
Cash paid to creditors 2 500
Cheques paid to creditors 20 000
Cheques received from debtors 25 000
Cash received from debtors 4 500
Customers cheques returned unpaid 1 000
Set off from sales ledger to purchases ledger 600

 

Q7.       The following details are available from the books of Mathews for the month of June, 2003.

     Prepare the sales ledger control account and purchases ledger control account for the month of June, 2003.

  $
Sales ledger control account balance b/d 10 000
Purchases ledger control account balance b/d 8 000
Purchases for the month 12 000
Sales for the month 16 000
Returns inwards   1 000
Returns outwards 400
Payments to creditors 11 000
Receipts from debtors 15 000
Customers’ cheques returned unpaid 500
Bad debts written off    300
Discount received 550
Discount allowed 750
Transfer from purchases ledger to sales ledger    600
Credit balance in sales ledger control account 600
Debit balance in purchases ledger control account 200

 

Q 10.  The following information is relating to the business of Anson for the month ended 31st March 2003:-

Credit sales and return inwards are subject to 10% trade discount on list price.

1st March 2003 Debtors

4,000

  Creditors

2,000

31 March Credit sales at list price

2,00,00

  Cash sales

5,000

  Returns inwards at list price

1,500

  Credit purchases

12,000

  Discount allowed

1,500

  Discount received

1,400

  Customer’s cheque returned by bank with remarks of “insufficient funds”

900

  Interest charged on overdue debts

250

  Return outwards

750

  Cheques paid to suppliers

7,000

  Cheques and cash received from credit customers

15,000

  Credit balance in sales ledger

300

  Bad debts written off

600

 

Required:-

  1. Make sales ledger control accounts of Mr. Ibrahim for the month of March 2003.
  2. Calculate total Turn over on 31st March 2003

 

Q11.     The following information was obtained from the books of K. Vasanthi.

   

      $

1st April 2003 Trade debtors

19,012

  Trade creditors

5,160

  Stock in trade

15,000

31st March 2004 Credit sales

40,690

  Credit purchase at list price*

14,400

  Purchase return at list price*

     400

  Sales return

240

  Cash and cheque received from debtors

39,160

  Customers cheque dishonored

500

  Cash and cheque paid to suppliers

10,340

  Discount received

380

  Discount allowed

420

  Interest charged to customers on Overdue accounts

140

  Bad debts written off

310

  Balance in the sales ledger set off against balance in the purchase ledger

700

  Cash refunds from suppliers for over payments

120

  Debit balance in purchase ledger

80

  Credit balance in sales ledger

124

  Overdue interest charged by our suppliers

260

  Cash refunds for over payments made by customers

360

*All purchases and purchase returns were subject to a trade discount of 20%off the list price. During the year cash sales were $ 22 000 and cash purchase were $ 12,500.

*On 31st March 2004 the stock in trade was valued at $ 12,500.

Required:-

  1. Total Debtors Account for the year ended 31st March 2004
  2. Total Creditors Account for the year ended 31st March 2004.
  3. c.       Calculate the Gross profit of the business for the year ended 31st march 2004.

 

Q12.  The following details are available from the books of a business for the year ended 31stDecember 2002:-

    $
On 01-01-2000      The balance in the provision for bad debts account          400
On 31-12-2000      Total debtors 12 000
On 01-01-2002      Purchase ledger control account balance 12 700
On0 1-01-2002      Sales ledger control account balance 14 200
On 31-12-2002:  
Cheque issued to suppliers 19,200
Cheque received from customers 50,400
Discount allowed 400
Discount received 600
Returns inwards 1 000
Return outwards 900
Bad debts written off 1 200
Dishonored cheque returned to us 1 200
Credit sales 52 000
Credit purchases 28 000
Set off from purchase ledger to the sales ledger 2 000

 

5% of year end debtors should be created as provision for bad debts

Required to prepare:-

a. Purchase ledger control account for the year ended 31st December 2002

b.Prepare the sales ledger control account for the year ended 31st Dec 2002.

c.The provision for bad debts a/ct and the balance sheet extracts for the 3 years ended 31st Dec        2000,2001 and 2002.

 

 

Q13. The following details are available from the books of a business for the year ended 31stDecember 2002:-

 

     $
On 01-01-2000      The balance in the provision for bad debts account             600
On 31-12-2000      total debtors 18 000
On 01-01-2002      Purchase ledger control account balance 19 150
On 01-01-2002      Sales ledger control account balance 21 300
On 31-12-2002:  
Cheque issued to suppliers 28 800
Cheque received from customers   75 600
Discount allowed 600
Discount received   900
Returns inwards   1 500
Return outwards   1 200
Bad debts written off   1 800
Dishonored cheque returned to us    1 800
Credit sales 78 000
Credit purchases   42 000
Set off from purchase ledger to the sales ledger 3 000

  

5% of year end debtors should be created as provision for bad debts

Required to prepare:-  Purchase ledger and sales ledger control accounts for the year ended 31stDecember 2002

 

Control Account Questions:

 

Q1.The following balances have been extracted from the books of a business on 31 may 2006 Prepare the Sales Ledger control account

 

 
Opening Debtors 6 000
Receipts from debtors 11 400
Discounts allowed 600
Returns Inwards   500
Bad debts written off 500
Set off from purchase ledger 1 000
Credit sales of goods 15 000
Credit balances on 31 May 2006 200
Dishonored cheques 100
Interest charged from debtors 100
Cash refunds to customers 50

 

Q2.The following balances have been extracted from the books of a business on 31 may 2006 Prepare the Sales Ledger control account

 

 

  $
Opening Debtors 10 000
Receipts from debtors 21 500
Discounts allowed 500
Returns Inwards 300
Bad debts written off 100
Set off from purchase ledger 800
Credit sales of goods 25 000
Credit balances on 31 May 2006 300
Dishonored cheques 1 000
Interest charged from debtors 200
Cash refunds to customers 100

 

Q3.  The following balances have been extracted from the books of a business that uses control accounts. The business makes up the control accounts on 31 may 2006.Prepare the Purchases Ledger Control Account

                                                                     

  $
Opening Creditors     4 000
Payments to creditors 7 600
Discounts received   400
Purchases returns 500
Set off from Sales Ledger   1000
Interest charged by suppliers   200
Cash refunds from suppliers 100
Credit Purchases 12 000

 

Q4.The following balances have been extracted from the books of a business that uses control accounts. The business makes up the control accounts on 31 may 2006. Prepare the Purchases Ledger Control Account

                     

  $
Opening Creditors 6 000
Payments to creditors 10 400
Discounts received 600
Purchases returns 750
Set off from Sales Ledger 1 500
Interest charged by suppliers 300
Cash refunds from suppliers      150
Credit Purchases 18 000

Q5.       The following details are available from the books of Weston for the month of May, 2003.Prepare Sales ledger control account and Purchases ledger control account.   

                                                                     

  $
Opening debtors 4 000
Opening creditors 3 800
Cash received from debtors 8 000
Cheques received from debtors   60 000
Cheques paid to creditors 55 000
Cash paid to creditors 7 000
Bad debts written off during the year 750
Discount allowed 1 250
Discount received   1 000
Returns inwards 800
Returns outwards   500
Transfer from purchases ledger to  
sales ledger 500
Credit sales 80 000
Credit purchases 71 000

Q6.       From the following information prepare the sales ledger control account and purchases ledger control account.

 

  $
Opening debtors   12 000
Opening creditors 8 000
Credit sales 30 000
Credit purchases 25 000
Returns inwards 500
Returns outwards   800
Discounts allowed 1 000
Discounts received 300
Bad debts written off   200
Cash paid to creditors 2 500
Cheques paid to creditors   20 000
Cheques received from debtors   25 000
Cash received from debtors 4 500
Customers cheques returned unpaid 1 000
Set off from sales ledger to purchases ledger 600

 

Q7.       The following details are available from the books of Mathews for the month of June, 2003.

Prepare the sales ledger control account and purchases ledger control account for the month of June, 2003.

 

  $
Sales ledger control account balance b/d 10 000
Purchases ledger control account balance b/d 8 000
Purchases for the month 12 000
Sales for the month 16 000
Returns inwards 1 000
Returns outwards 400
Payments to creditors 11 000
Receipts from debtors 15 000
Customers’ cheques returned unpaid 500
Bad debts written off 300
Discount received 550
Discount allowed 750
Transfer from purchases ledger to sales ledger 600
Credit balance in sales ledger control account 600
Debit balance in purchases ledger control account 200

 

 

Q 8.  The following information is relating to the business of Anson for the month ended 31st March 2003:-

Credit sales and return inwards are subject to 10% trade discount on list price.

 

1st March 2003 Debtors

4,000

  Creditors

2,000

31 March Credit sales at list price

2,00,00

  Cash sales

5,000

  Returns inwards at list price

1,500

  Credit purchases

12,000

  Discount allowed

1,500

  Discount received

1,400

  Customer’s cheque returned by bank with remarks of “insufficient funds”

900

  Interest charged on overdue debts

250

  Return outwards

750

  Cheques paid to suppliers

7,000

  Cheques and cash received from credit customers

15,000

  Credit balance in sales ledger

300

  Bad debts written off

600

 

Required:-

  1. Make sales ledger control accounts of Mr. Ibrahim for the month of March 2003.
  2. Calculate total Turn over on 31st March 2003

 

Q9.     The following information was obtained from the books of K. Vasanthi.

 

   

      $

1st April 2003 Trade debtors

19,012

  Trade creditors

5,160

  Stock in trade

15,000

31st March 2004 Credit sales

40,690

  Credit purchase at list price*

14,400

  Purchase return at list price*

     400

  Sales return

240

  Cash and cheque received from debtors

39,160

  Customers cheque dishonored

500

  Cash and cheque paid to suppliers

10,340

  Discount received

380

  Discount allowed

420

  Interest charged to customers on Overdue accounts

140

  Bad debts written off

310

  Balance in the sales ledger set off against balance in the purchase ledger

700

  Cash refunds from suppliers for over payments

120

  Debit balance in purchase ledger

80

  Credit balance in sales ledger

124

  Overdue interest charged by our suppliers

260

  Cash refunds for over payments made by customers

360

*All purchases and purchase returns were subject to a trade discount of 20%off the list price. During the year cash sales were $ 22 000 and cash purchase were $ 12,500.

*On 31st March 2004 the stock in trade was valued at $ 12,500.

Required:-

  1. Total Debtors Account for the year ended 31st   March 2004
  2. Total Creditors Account for the year ended 31st March 2004.
  3. c.       Calculate the Gross profit of the business for the year ended 31st March 2004.

 

 

Q10.  The following details are available from the books of a business for the year ended 31st December 2002:-

       

  $
On 1-1-2000      The balance in the provision for bad debts account     400
On 31-12-2000   Total debtors 12 000
On 1-1-2002      Purchase ledger control account balance 12 700
On 1-1-2002      Sales ledger control account balance 14 200
On 31-12-2002:  
Cheque issued to suppliers   19,200
Cheque received from customers 50,400
Discount allowed 400
Discount received    600
Returns inwards 1 000
Return outwards 900
Bad debts written off 1 200
Dishonored cheque returned to us   1 200
Credit sales 52 000
Credit purchases   28 000
Set off from purchase ledger to the sales ledger 2 000

 

5% of year end debtors should be created as provision for bad debts

Required to prepare:-

a. Purchase ledger control account for the year ended 31st December 2002

b.Prepare the sales ledger control account for the year ended 31st Dec 2002.

c.The provision for bad debts a/ct and the balance sheet extracts for the 3 years ended 31st Dec        2000,2001 and 2002.

 

Q11. The following details are available from the books of a business for the year ended 31stDecember 2002:-

     

    $
On 1-1-2000      The balance in the provision for bad debts account             600
On 31-12-2000   total debtors 18 000
On 1-1-2002      Purchase ledger control account balance 19 150
On 1-1-2002      Sales ledger control account balance   21 300
On 31-12-2002:  
Cheque issued to suppliers 28 800
Cheque received from customers   75 600
Discount allowed 600
Discount received 900
Returns inwards 1 500
Return outwards 1 200
Bad debts written off 1 800
Dishonored cheque returned to us    1 800
Credit sales 78 000
Credit purchases 42 000
Set off from purchase ledger to the sales ledger 3 000

 

5% of year end debtors should be created as provision for bad debts

Required to prepare:-  Purchase ledger and sales ledger control accounts for the year ended 31stDecember 2002

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