difference between sales and the sales ledger control account

jslutw · October 2011

Hi i have recently started my course and am getting very confused to when filling out the main ledger on a subsidory account for eg a sales day book why teh sales ledger control account is the opposite....

I am finding it hard to understand the difference

mrb82 · October 2011

My way of understanding it is that the SLCA are your assets. They are credit sales that you are expecting money from at some point in the near future, and this looks good to lenders.

Best advice I was given, try not to understand it too much, else you'll get confused. So long as you remember the SLCA as your assets and your PLCA as your liabilities, it will help you with your double entry, and will help you make sure the VAT is on the right side of the T account!

As I say, this is how I remember it, other members may completely disagree, in which case I need to revise more before my next exam

Monsoon · October 2011

The SLCA is an asset. It's debtors, accounts receivable, the sum total of the money you are owed. It is part of the balance sheet and part of the main ledger.

Day books, and the customer/sales ledger are separate. They carry the detail, whereas the SLCA is a summary, or an overall view. Each individual sale will be posted here, and then a total for the day/week/month carried over to the SLCA. Therefore, the balances on the day books and sales ledger at any time should match the balance on the SLCA in the main ledger.

JasonTurbo · October 2011

That's some great advice there people, I'm just started to get my head round the general ledger and the associated day books. The whole debit/credit thing was a bit confusing as I was looking at it from the view of being credit=good and debit=bad however that isn't applicable when using T accounts. It's better to view debit and credit as just left or right side of the account, and then think of the accounting equation to understand what side to use. Slowly getting there....

Monsoon · October 2011

When you pay money into your bank, it's a credit.

That's because your bank statement is written by the bank, from their point of view. It's a credit, a liability, because they owe you money.

When you're overdrawn, your account is in debit. You owe them money, so they have an asset there.

As you say, smile nod and agree and eventually it will sink in!

jslutw · October 2011

confused with these ledger control accounts!

Hey guys im totally still getting very confused with certain ledgers... Ive been looking at past papers where they ask you for example say what accounts you bring down in your main ledger yet purchases is on credit and the purchase ledger control acount is the opposite can you explain why

SandyHood · October 2011

Try to think of Debit entries going [size=+1] in[/size] to an account
and Credit entries coming [size=+1] out[/size] of an account

When your supplier sells you something (on credit)
It comes [size=+1] out[/size] of the supplier's account within the purchase ledger credit
and goes [size=+1] in[/size] to the purchases account debit

When your customer buys something from you (on credit)

It comes [size=+1] out[/size] of your sales account credit
and goes [size=+1] in[/size] to the customer's account within the sales ledger debit

jslutw · October 2011

what about the purchase ledger control?

SandyHood · October 2011

Purchase ledger control is the summary account for all the purchase ledger accounts If it makes it easier to visualise, think of it as all the suppliers accounts in one

jslutw · October 2011

Ok so on a past paper when they ask you to label the main ledger accounts and whether it's a debit or credit why is the purchases ledger control on the debit and purchases on credit

Bluewednesday · October 2011

If you think of the double entry, the purchases is an expense so that will be the debit but the purchase control is a creditors account (it's what you owe) so any addition to it will be a credit.

The entries to the debit side of the purchase control will be payments, credits and discounts received.

Perhaps it would help if you can refer to which past paper you are looking at

jslutw · October 2011

I'm still slightly confused when they ask you to label the account names in main ledger - I'm looking at dec 2008 task 1.1 b purchases are on debit and the ledger control is opposite

Carl168 · October 2011

Hi,

I'm confused to be honest..

the answer is correct.

Is your question referring to the labelling within the T-accounts or the bal c/d?

If its the bal c/d then its just the balancing figure you use to balance the accounts with at the end of the period.

If its the labelling then thats just how double entry works - you debit the purchases T - account (which is the main heading) with the purchases in the period - and within that account for that entry you enter in the "details" part the corresponding T account where the figure associates with

JaffasGirl · October 2011

i know you should probably look at the past papers, or as many as you can. But seeing as the past papers you are looking at are not to do with this years exams, stop looking and don't give your self the headache. 2008 was still the paper based exams and they cover more than you need to for BA1. Speaking of which control accounts are not really covered until BA2. Going through as many of the practice questions and the two exams on here should be enough to help you get an idea of what the exam will be like, but try and stick to the ones based on the last couple of years exams, purely because at least then you are only testing yourself on what you have actually covered!

But to answer the question your asking, i think that the exam is wrong...lol unless anyone else can think of a reason that the Purchase Ledger Control account would have a debit balance?

Monsoon · October 2011

The expenses are a debit, the money owed to the suppliers is always a credit, not a debit. The balance on the PLCA, assuming the net picture is that you owe suppliers money, will always be a credit.

nicd1981 · October 2011

this helped me when i first started studying AAT

day books:

SALES credit
VAT credit
SDB debit

PURCHASES debit
VAT debit
PDB credit

Trial Balance

PALED AND CLIPS

DEBIT CREDIT

P purchase C capital
A assets L liabilities
L losses I income
E expenses P profit
D drawings S sales

If you can remember these your debits and credits will be easy
remember sales returns and purchase returns are the opposite

nic x studying level 4 xx

ahmed nurein · November 2012

Hi Monsoon,

Seems you are doing such an excellent work here and It's really great, Thanks for all your posts. However I'm also struggling with the general ledger. Can you please help with the process of transfering from sales day book to the general ledger and then to the subsidiary sales ledger. Thank you.

usama · February 2017

What is the double entry if it is not register book
Purchases 1000 on credit
Sale tax 17.5 %

difference between sales and the sales ledger control account

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