Theory question 102
Control Accounts(a) List four items each that are found on the: (i) credit side of the sales ledger control account; (ii) debit side of the purchases ledger control account.
(b) List seven types of errors a trial balance will not reveal.
Show the model answer
(a)(i) Sales ledger control (credit), any four: cash and cheques received from customers; discount allowed; returns inwards; bad debts written off; bills receivable; set-off/contra with purchases ledger; opening credit balance; closing debit balance c/d.
(ii) Purchases ledger control (debit), any four: cash and cheques paid to suppliers; discount received; returns outwards; bills payable; set-off/contra; opening debit balance; closing credit balance c/d.
(b) Errors of omission; commission; principle; original entry; complete reversal of entries; compensating errors; duplication (entry made twice on both sides).
Credit side of debtors' control = things that reduce what customers owe.