Control Accounts

Susieandspooky

Hi everyone,

I'm halfway through the foundation level and i've got the hang of what should be debits and credits etc, but i keep getting stuck on control accounts! Can anybody explain what side they need to go on and why and are there any easy ways to remember this?
I would be very grateful for your help

:001_smile:

Whoops sorry i've just realised i've put this thread onto the site feedback forum instead of the other one, but don't know how to delete it, so would be grateful for replys anyway.

Rachey

Sales Ledger Control Account

The balance brought down and any new sales to debtors is always on the debit side.

The credit side is everything that can reduce the balance, so it would be payments, sales returns, discount allowed, bad debts, contra entries, basically anything that reduces the amount due from your customers.

You'll probably not get anything other than balance brought down and new sales on the debit side.

Purchase ledger control account

Same as above but the other way round! Balance brought down and new purchases on credit side and anything that reduces the amount you owe such as payments you've made, discounts received, purchase returns etc on the opposite side (debit entries)

The way i remember it is that it's the opposite way round to all the main ledger accounts. For example, in the main ledger, the sales account has just credit entries as sales are income, so it must go on the credit side. So the SLCA it is on the opposite side, on the debit.

Discounts allowed is classed as an expense, so in the discounts allowed account on the main ledger it must be a debit entry (expenses are always debit entries) so in the SLCA it must be on the opposite side, so it's a credit entry.

It's a lot to take in but once you've got the hang of it you'll be ok! It's easier to just draw the 2 control accounts and write what goes on what side and look over it a couple of times a day. It'll soon stick in your mind!!

rachy1975

How i remebered it is...what ever you do to the subsidary ledgers you do to the SLCA as this is all your debtors accounts pout together..
PLCA is all your creditors subsidary accounts put together

So all the individual invoices debited to your debtors individual subsidary accounts are added together and debited to the SLCA...all payments credited to debtors individual subsidary are added together and credited to SLCA

vice versa for the PLCA

hope this helps

:001_smile:

Rachey

rachy1975 wrote: »

How i remebered it is...what ever you do to the subsidary ledgers you do to the SLCA as this is all your debtors accounts pout together..
PLCA is all your creditors subsidary accounts put together

So all the individual invoices debited to your debtors individual subsidary accounts are added together and debited to the SLCA...all payments credited to debtors individual subsidary are added together and credited to SLCA

vice versa for the PLCA

hope this helps

:001_smile:

I meant to put that on too! I think its harder to explain than to do :-)

Susieandspooky

Thankyou everyone for your replies, it really makes sense and been very helpful.
Thankyou
:001_smile: