Glossary Thread

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Hi,

All you people with extreme wisdom can maybe add a word or words used in accounts procedures and pop a quick explanation of what it is and how to use it...

I'll start by ASKING someone something probably so simple you want to kick me in the bawls or something, but please don't.

I have seen multiple posts on here about Control Accounts (Sales Ledger Control and Purchase Ledger Control) so far in our night course, the Control Account hasn't been mentioned... should I be worried or is my tutor referring to the control account as a different name...

Cheers

Jamie

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    Well, I am doing mine by Distance Learning, but I do seem to remeber the book talking about Control Accounts before actually explaining what they are... So maybe you haven't got to that bit yet?

    I can't imagine what else they would be called. I have heard them called Creditors/Debtors Control, but that still has the word 'control.'

    I doubt that helped, but there you go!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    I just wondered to be honest whether "Sales Ledger Control Account" was the "sales" account in general ledger or whether it was something else... my exam is this afternoon and was a little worried if I got the accounts muddled up
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    Debtors Control
    Sales Ledger Control
    Trade Receivables Control

    This is a collection of all the customers accounts on the sales ledger, so it shows an accumulated figure relating to debtors
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    Sorry Paul to be a dummy, but as I understood that...

    If I had a piece of paper with 6 different customers (sales) accounts then the control account would just be a collection of all that they owe to my company
    ie:

    customer 1 owes me £100
    Customer 2 owes me £100
    Customer 3 owes me £100
    Customer 4 owes me £100
    Customer 5 owes me £100
    Customer 6 owes me £100

    then the sales ledger control account would show the names of the companies that owe me money and the total of what ALL companies owe me? Cheers Paul
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    In addition to Paul22's list

    They are also known as 'Totals Accounts' - so Debtors version and Creditors version.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    It wouldn't show you the names of the companies but would show you the total amounts you're owed.

    I've some notes on the SLCA here

    Chris
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    Yeah, Control Accounts are a bit unusual.

    Basically, you might have accounts with these names:

    . Sales
    . Purchases
    . Sales Ledger Control
    . Purchase Ledger Control

    The first two serve a different purpose to the second two.

    The first two record how much stuff you've bought and sold in the year.

    The second two record how much is owed because of these transactions.

    For Example:

    We sell £200 in cash sales to Nigel, a shockingly intelligent snail with a penchant for hard liquor. So in the accounts, we do this:

    DR Bank Account
    CR Sales

    The Bank Account is used because we've received money immediately. It's a cash-in-hand kind of sale.

    The Sales account is used because it's basically just a counter of how much money we've made in sales. Like the clicker that Ben Affleck uses in that Lynx advert to count the number of... anyway...

    THEN, we sell £400 on credit terms to Helgar, a creature made entirely of snot. Helgar promises to pay us in 30 days.

    DR Sales Ledger Control
    CR Sales

    It's still a sale, so our Sales Account still notches up a sale.

    However, cash hasn't gone into the bank yet. So we dump the other side of the transaction into a Sales Ledger Control Account.


    So after this, the balances of the accounts are like this:

    BANK ACCOUNT: £200 DEBIT
    To show that we've received £200 from Nigel the Snail.

    SALES ACCOUNT: £600 CREDIT (200 + 400)
    To show that so far this month, we've made £600 worth of sales.

    SALES LEDGER CTRL: £400 DEBIT
    To show that we are owed £400. Think of it as a 'Sales-Made-But-Not-Paid Account'


    Finally, all we do is make a little note somewhere else that the £400 in Control is owed by Helgar (the curvacious snot creature). This note-somewhere-else is in the Sales Ledger (which is basically just a diary of who owes what).
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    Cheers fella - I already knew that part though, was just a little confused about the Control accounts, but going through those now @ college...

    Cheers Chris
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread


    You can actually have an almost infinite number of control accounts, depending on the business.

    They aren't limited to the main ones mentioned here - a control can be used to check virtually anything extracted from your accounts.

    I have a master spreadsheet which is linked to my TB and my source data with about 20 control accounts in.

    This ensures that at the month/quarter/year-end, everything agrees, is correctly posted and balances.

    :wink:

    Helen
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    so you're a spreadsheet-aholic then like me - whenever I learn how to do something - I always make a spreadsheet about it so I can easily use it.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Glossary Thread

    It's a question of saving time.

    I'm an accountant for a builder and a builders merchant and there's cash/credit cards/contracts/retentions etc to deal with.

    Handwritten just wouldn't work - and I like the flexibility of being able to introduce new controls (not just control accounts!).

    Helen

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