Control Accounts. Four main control accounts –Sales Ledger Control Account –Purchase Ledger Control Account –VAT Control Account –Wages Control Account.

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Presentation transcript:

Control Accounts

Four main control accounts –Sales Ledger Control Account –Purchase Ledger Control Account –VAT Control Account –Wages Control Account

What books of prime entry records information about ‘Credit Sales’? Sales day book Sales returns day book Cash book

Sales Ledger Control Account This reconciles the totals of a number of subsidiary accounts. -Credit sales from sales day book -Sales returns from sales returns day book -Payments received from the cash book -Settlement discount allowed from the cash book Queston 1

Question 1

Sales Day Book (SD21) DateCustomer Invoice numberFolioGrossVATNet 03-MayA45SL MayC46SL MayB47SL MayC48SL MayB49SL MayA50SL Total

Question 1 Sales Day Book (SD21) DateCustomer Invoice numberFolioGrossVATNet 03-MayA45SL MayC46SL MayB47SL MayC48SL MayB49SL MayA50SL Total

Cashbook DRCash Book - Debit Side - Receipts DateDetailsRefBankVAT Discount Allowed Cash Sales Trade Receivab les 06-MayBSL MayASL MayCSL MayASL MayCSL MayBSL Totals General Ledger Account Debit Entry Credit Entry

Cashbook DRCash Book - Debit Side - Receipts DateDetailsRefBankVAT Discount Allowed Cash Sales Trade Receivab les 06-MayBSL MayASL MayCSL MayASL MayCSL MayBSL Totals General Ledger Account Debit Entry Bank Discounts Allowed Credit Entry VAT Trade Receivables

Purchases Ledger Control Account This reconciles the totals of a number of subsidiary accounts. -Credit purchases from purchases day book -Purchases returns from purchases returns day book -Payments made from the cash book -Settlement discount received from the cash book Question 2

Customer Invoice Number Supplier Code Invoice Total £ VAT £ Net £ Rowley Ltd7869PL Jipsum plc323980PL Total Purchase Day Book Customer Invoice Number Supplier Code Invoice Total £ VAT £ Net £ Rowley LtdCN627PL Jipsum plcCN08PL Total Purchase Returns Day Book

Question 2 Customer Invoice Number Supplier Code Invoice Total £ VAT £ Net £ Rowley Ltd7869PL Jipsum plc323980PL Total Purchase Day Book Customer Invoice Number Supplier Code Invoice Total £ VAT £ Net £ Rowley LtdCN627PL Jipsum plcCN08PL Total Purchase Returns Day Book

Question 2 Cashbook DetailsRef Bank £ Vat £ Discount Received £ Cash purchases £ Purchase Ledger £ Sundry £ Rowley LtdPL Jipsum plcPL Cash Purchase Total General ledger account Debit entry Credit entry

Question 2 Cashbook DetailsRef Bank £ Vat £ Discount Received £ Cash purchases £ Purchase Ledger £ Sundry £ Rowley LtdPL Jipsum plcPL Cash Purchase Total General ledger account Debit entry Credit entry

Question 2 Cashbook DetailsRef Bank £ Vat £ Discount Received £ Cash purchases £ Purchase Ledger £ Sundry £ Rowley LtdPL Jipsum plcPL Cash Purchase Total General ledger account Debit entry VATPLCAPurchasesPLCA Credit entryBank

Question 3 The following company has 4 credit customers. The opening balances on their debtors accounts at 01/05 are as follows: Virgo Partners McGowan and Son JJ Westrope Jacks Ltd Total Enter the openng balances in to the Sales Ledger Accounts and the SLCA

Question 3 - Answer Reconciliation of Sales Ledger to Sales Ledger Control Account Sales Ledger Control Account Balance Sales Ledger Balances Virgo Partners McGowan & Son JJ Westrope Jacks Ltd

Sales Ledger Control Account Reconciliation Periodic check between the balance on the sales ledger control account and the total of the individual balances on the sales ledger accounts. Total of balances on sales ledger accounts Sales Ledger Control Account Debtors Control Trade Receivables Balance c/d

DrCr DateDetails£DateDetails£ Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f SDB Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f CB SDB Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f CB SDB CB Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f CB SDB CB SRDB Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f CB SDB CB SRDB Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f CB SDB CB SRDB Balance c/d Sales Control Account Activity Q4

DrCr DateDetails£DateDetails£ 01-JanBalance b/f CB SDB CB SRDB Balance c/d Balance b/d

Question 4 DrSales Ledger Control AccountCr DateDetails£DateDetails£ 01-JanBalance b/d CB SDB CB SRDB Balance c/d Balance b/d

Questions 5 & 6

Question 7 DrSales Ledger Control AccountCr DateDetails£DateDetails£

Why Reconcile?

Purchase Ledger Control Account Try questions 9, 10 & 11

VAT Control Account Used to help prepare the VAT return. The balance on the VAT control account should equal the amount on the VAT return. Balance could be a debit (if amount collected from VAT on sales is less than the VAT paid on purchases) Balance could be a credit (if amount collected from VAT on sales is more than the VAT paid on purchases) Information in the control account is obtained from the books of prime entry What books of prime entry would we use? And what information is contained in them that we would use?

VAT Control Account Dr Cr

VAT Control Account Dr Cr Balance b/dX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesXVAT on cash salesX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesXVAT on cash salesX VAT on sales returnsX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesXVAT on cash salesX VAT on sales returnsXVAT on purchase returnsX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesXVAT on cash salesX VAT on sales returnsXVAT on purchase returnsX VAT on recoverable debts written off X

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesXVAT on cash salesX VAT on sales returnsXVAT on purchase returnsX VAT on recoverable debts written off XVAT refunded by HMRCX

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesXVAT on cash salesX VAT on sales returnsXVAT on purchase returnsX VAT on recoverable debts written off XVAT refunded by HMRCX VAT paid to HMRC

VAT Control Account Dr Cr VAT on credit purchaseXBalance b/dX VAT on cash purchaseXVAT on credit salesX VAT on petty cash purchasesXVAT on cash salesX VAT on sales returnsXVAT on purchase returnsX VAT on recoverable debts written off XVAT refunded by HMRCX VAT paid to HMRCX

VAT Control Account ££ Credit Purchases750Credit Sales900 Sales returns10Purchase returns5 Cash purchases150Cash Sales200 Balance c/d Balance B/d195

Question 18 Errors!

Errors & the SLCA i.e. your Sales Ledger does not balance with the SLCA DrSales Ledger Control AccountCr DateDetails£DateDetails£

Errors & the SLCA i.e. your Sales Ledger does not balance with the SLCA DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774

a) The SDB was under cast by £100 DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774

a) The SDB was under cast by £100 DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774 JuneSDB under cast100

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774 JuneSDB under cast100 b) A page from the SRDB was not posted £450

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100 b) A page from the SRDB was not posted £450

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100 c) An invoice from SDB has been posted as to the Sales Ledger as £769 instead of the correct figure of £679

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100 d) A discount allowed to one customer of £16 has been entered on the wrong side of the Sales Ledger

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100 e) An irrecoverable debt of £210 has been written off in the customers individual account but not in the SLCA

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100JuneBad Debt210 e) An irrecoverable debt of £210 has been written off in the customers individual account but not in the SLCA

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100JuneBad Debt210 f) A credit balance of £125 in the sales ledger had been listed as a debit balance

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100JuneBad Debt210 41,874 Balance the SLCA

DrSales Ledger Control AccountCr DateDetails£DateDetails£ June Balance b/d41,774JuneSRDB450 JuneSDB under cast100JuneBad Debt210 JuneBalance c/d41,214 41,874 July Balance b/d41,214 Balance the SLCA

Sales Ledger£ Original total of balances Amended list of balances Amended Sales Ledger Control A/C

Sales Ledger£ Original total of balances41,586 Amended list of balances Amended Sales Ledger Control A/C

Sales Ledger£ Original total of balances41,586 Amended list of balances Amended Sales Ledger Control A/C41,214

Sales Ledger£ Original total of balances41,586 Amended list of balances Amended Sales Ledger Control A/C41,214

Sales Ledger£ Original total of balances41,586 c)-90 Amended list of balances Amended Sales Ledger Control A/C41,214

Sales Ledger£ Original total of balances41,586 c)-90 d)-32 Amended list of balances Amended Sales Ledger Control A/C41,214

Sales Ledger£ Original total of balances41,586 c)-90 d)-32 f)-250 Amended list of balances Amended Sales Ledger Control A/C41,214

Sales Ledger£ Original total of balances41,586 c)-90 d)-32 f)-250 Amended list of balances41,214 Amended Sales Ledger Control A/C41,214