Control accounts

MWAUGH1983

Just wondered if anyone had trouble with control accounts as this tends to be the first question on the exam?

I am ok with cr and dr but I am unsure on what to pick out when I do this question as you just get the cash/bank book and part of the financial statements and I struggle to get the right figures.

Anyone give me any tips on this?

Cheers
Martin

amyjayne27

Hi Martin,

Do you mean doing the control accounts with incomplete figures? If so, in the question it will clearly tell you what missing figure they are looking for i.e. 'showing clearly the figure for credit sales.' So read the question, and this is what you need to find.

If a sales ledger control account, just remember balance b/d and credit sales are debits then everything else is a credit (in the question) and vice versa for purchases.

So, for your balance b/d, if not given, this is trade debtors/trade creditors at the BEGINNING of the year, and balance c/d is trade debtors/creditors at the END of the year. This will be shown clearly in the question.

Then, receipts from debtors/ payments to creditors will be shown in the bank statement part of the question, and this is entered in the control accounts as bank (credit side for sales, debit side for purchases.)

The missing figure when adding up both columns is the figure you need.

So to recap:

Sales control account
Dr = Balance b/d (Trade debtors START of year)
Dr = Credit sales

Cr = Bank (Receipts from debtors)
Cr = Discounts allowed
Cr = balance c/d (Trade debtors END of year)

Purchases control account
Cr = Balance b/d (Trade creditors START of year)
Cr = Credit purchases

Dr = Bank (Payments to creditors)
Dr = Discounts received
Dr = Balance b/d (Trade creditors END of year)

There are more entries in a control account which will be explained in full in your text book, but the ones above are usually the main figures they ask for in the exam.

Hope this helps!

Amy

blobbyh

Did it help you Martin seeing as you were online today and that was a pretty good answer from Amy?

MWAUGH1983

Sorry I was meaning to post!

It seem to clear things up a bit so cheers for that!

slugbug

can you also explain the vat control account for me as Im sure I got that wrong in the June exam .... thanks