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Chapter 9

Control account reconciliations

4.1 Overview

 Control accounts are nominal ledger accounts that summarise a large number
of transactions. As such they are part of the double-entry system.

 They are used to prove the accuracy of the ledger accounting system.

 They are mainly used with regard to receivables – sales ledger control
account and with regard to payables – purchase ledger control account.

When an entity transfers the daily total of the sales daybook into the nominal ledger
the double-entry is:

Dr Sales ledger control account

Cr Sales

When an entity transfers the daily total of the purchase daybook into the nominal
ledger the double-entry is:

Dr Purchases

Cr Purchase ledger control account

At the same time most entities will maintain what is referred to as a ‘memorandum’.
This is a separate list of individual receivable and payable amounts due from each
customer and to each supplier.

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