Control Account – lesson 7

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Understanding a control account is a key part of CONTROL ACCOUNTS, JOURNALS and the BANKING SYSTEM course.

You are part way through the CONTROL ACCOUNTS, JOURNALS and the BANKING SYSTEM course and you should have read the pages listed below before reading this page:

Welcome to Control Account.

An Accounting Trainee or Bookkeeper should have a good understanding of the nature and purpose of a control account and how it is used to master the memorandum accounts. You should be aware of the double entry bookkeeping involved in control (or Total) accounts, ensuring that the balance on the control account agrees with the sum of the individual balances of the memorandum accounts.

The Accounting examiner will expect you to have an excellent knowledge of using control accounts, in particular the:
-sales ledger control account
-purchase ledger control account
-VAT control account

using control accounts

You may be required to write a short report on the purpose of control accounts and how they work. You will almost certainly be required to produce a reconciliation between the control account balance and the total of balances in the memorandum accounts.

The Accounting examiner will expect you to have a thorough knowledge of using control accounts.

The link to Amazon for the recommended reading on Using Control Accounts is:

Now lets test your knowledge of a using control accounts – go to the test below.

QUIZ: Control Account.

Before attempting this quiz you should have read chapter 6 entitled Using Control Accounts of your recommended textbook “Bookkeeping 2".

Please attempt all questions and then press the submit button at the end, you will then be taken to your results page.

Good luck!



Name


1
A business has a memorandum receivables ledger and a receivables control account, which is part of the double entry. The balance on the receivables control is £15,091. However the list of receivables ledger balances totals £15,320.

The following errors are discovered.

(a) A receivable paid £10 in cash. This has been correctly recorded in the receivables ledger, but no entries have been made in the receivables control account.
(b) One of the receivables had a credit balance of £60. However this have been included as a debit balance in the receivables ledger total.
(c) Returns inward of £35 have been recorded in the receivables ledger, but not in the receivables control account.
(d) One page of the sales day book has been undercast by £100.
(e) When a sales invoice for £95 was entered in the receivables ledger, the figures were transposed and shown as £59.
(f) An error has been made in totaling the list of receivables ledger balances, which has been overcast by £90.

What is the corrected total of the balances extracted from the memorandum ledger. (The errors must be located first of course.)




2
Using the information in Q1 .

The Undercast of total invoices issued Sales day book (d) would be recorded as a .............. in the receivables control account.


3
Using the information in Q1.
Petty cash-posting omitted (a ) would be recorded as a ................... entry in the receivables control account


4
The double entry where the credit purchase includes sales tax (VAT)?
DEBIT: Purchases (VAT exclusive amount)
DEBIT: VAT
CREDIT: Payables (VAT inclusive amount)


5
The double entry for purchase returns with VAT?

DEBIT: Payables (VAT inclusive)
CREDIT: Purchase returns/Purchases (VAT exclusive)
CREDIT: VAT


6

A ................ entry is where balances in the sales ledger and the purchase ledger are set -off against one another.



7
A summary of each customer balance analysed into columns showing how long the amounts have been outstanding is called an ......... ............ analysis.


Hint


8
You have the following information :
-opening customer balances at start of month £50678
-credit sales for the month £45908
-sales returns for the month £789
What is the figure for closing customer balances at the end of the month?



9
You work as an accounts assistant for S Ltd. Today you are working on the sales ledger control account and sales ledger.

A summary of transactions with credit customers during April 20-4 is shown below.

Goods sold on credit £301,490
Money received from credit customers £106,280
Discounts allowed £450
Goods returned by credit customers £1100
Bad debt written off £980

The balance of customer accounts at 1 April 20-4 was £223,450.

Prepare a sales ledger control account for the month of April 20-4 from the above details, and what is the balance carried down as at 30th April 20-4?



10
You work as an accounts assistant for D Ltd. Today you are working on the purchases ledger control account and purchases ledger.

A summary of transactions with credit suppliers during April 20-4 is shown below.

Goods purchased on credit £48,565
Payments made to credit suppliers £32,368
Discounts received £650
Goods returned to credit suppliers £480

The balance of suppliers at 1 April 20-4 was £47600

Prepare a purchases ledger control account for the month of April 20-4 from the above details, and what is the balance carried down at 30 April 20-4?










Leaderboard for using contol accounts

1. Sana-30 Points
2. Sana-30 Points
3. Ben Graham-30 Points
4. RENATA-27 Points
5. Neal-27 Points

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