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Accounting reconciliations

1.2 The status of the control account

So far, we have considered that the double-entry is completed by entering each
transaction in the receivables personal accounts in the sales ledger, and entering the
totals of sales, returns, sales tax and cash received in the nominal ledger. Now that
we have introduced a control account, it might appear that we are duplicating the
entries in the sales ledger. Obviously, this cannot happen, as the ledger accounts will
be out of balance. We cannot have both the receivables accounts and the control
account as part of the double-entry system. Therefore, either one or the other of
these must be treated as being outside the double-entry system. The records that are
outside the double-entry system are known as memorandum accounts.

Illustrations and further practice

Now try question TYU 1 from Chapter 14 of the Study Text.

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