Theory question 103
Control Accounts3. (a) List the subsidiary books from which each of the following items are obtained: (i) payments in cash to creditors; (ii) credit sales; (iii) cash and cheques received; (iv) discount received; (v) discount allowed; (vi) credit purchases (vii) cash refund on account of overpayment by customers; (viii) bad debts written off; (ix) debtor's cheque dishonoured; (x) sales ledger balance set off against purchases ledger balance. (b) State two advantages of control accounts
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(a)(i) Cash book; (ii) sales day book; (iii) cash book; (iv) cash book (discount column); (v) cash book (discount column); (vi) purchases day book; (vii) cash book; (viii) journal; (ix) cash book; (x) journal.
(b) Any two: they check the arithmetical accuracy of each ledger and locate errors quickly; they give total debtors and creditors quickly for final accounts; they help detect fraud; they help find missing figures in incomplete records.
Cash movements come from the cash book; non-cash adjustments come from the journal.