Control Accounts

Question	Answer
What are the purposes of creditors / debtors control accounts? (3 pts)	1. To find errors in debtors / creditors quickly by confining the search to certain accounts. 2. Help management with decision making by being easy to determine the amount owed by debtors and owed to creditors. 3. Act as a check for the ledgers by comparing the control account balance with the total as per schedule.
Explain a "contra" item.	An offset of a debtor against a creditor where they are both the same person or business.
How could a credit opening balance occur in a Debtors Account?	1. If a debtor overpays his debt. 2. If a discount is allowed or goods are returned after a full payment.
Why might the Creditor's Control Account balance not agree with the balance in the Schedule of Creditors? (3 pts)	1. Incorrect totalling of the subsidiary books (purchases, purchases returns, cheque payments) sent to the control account. 2. Errors in the Creditors Ledger personal accounts transfered to the Schedule of Creditors Balances. 3. Failure to complete double-entry.

Resource summary

	Created by Daniels Kurilovs over 8 years ago