A controlling account summarizes all accounts in a subsidiary ledger. The balance of a controlling account equals the total of all account balances in its related subsidiary ledger. A listing of customer accounts , account balances, and total amount due from all customers.
What is control ledger account?
A control account is a summary account in the general ledger. The control account keeps the general ledger clean of details, but contains the correct balances used for preparing a company’s financial statements. The subsidiary ledger allows for tracking transactions within the control account in further detail.
What are the two controlling accounts?
There are two main types of control accounts: (i) Sales ledger (Receivables) control Account – also called total debtors.
What are the advantages of using subsidiary ledgers and control accounts?
The advantages of using subsidiary ledgers are that they: Permit transactions affecting a single customer or single creditor to be shown in a single account, thus providing necessary up-to-date information on specific account balances.
What is the relationship between a controlling account and subsidiary ledger?
Posting to General and Subsidiary Ledgers
| Question | Answer |
|---|---|
| What is the relationship between a controlling account and a subsidiary ledger | A controlling account summarizes all accounts in a subsidiary ledger. The balance of a controlling account equals the total of all account balances in its related subsidiary ledger. |
What is the difference between a controlling account and a subsidiary ledger?
A subsidiary account is used to track information at a very detailed level for certain types of transactions, such as accounts receivable and accounts payable. A control account is a summary-level account in the general ledger that contains aggregated totals.
Where does a subsidiary ledger go on the balance sheet?
A subsidiary ledger is a detailed list to support a control account. A control account appears on the balance sheet in summary or total, and are accounts like accounts receivable, accounts payable, and inventory.
What is a control account in the general ledger?
A control account is a summary account in the general ledger. The details that support the balance in the summary account are contained in a subsidiary ledger—a ledger outside of the general ledger.
Are there any limitations to a subsidiary ledger?
Following are the few limitations – It may contain undetected errors. Subsidiary ledgers do not assure the accuracy of ledger accounts. The items may be posted to irrelevant accounts, which may add to errors in the individual ledgers and ultimately impact the overall accuracy of the subsidiary ledger.
Where are the details of a control account?
The details for each control account will be found in a related (but separate) subsidiary ledger. The control account keeps the general ledger free of details, but still has the correct balance for preparing the company’s financial statements.
