level: Control Accounts and Reconciliations
Questions and Answers List
level questions: Control Accounts and Reconciliations
| Question | Answer |
|---|---|
| What is a control account? | A general ledger account that summarises a large number of transactions and forms part of the double entry system. |
| How is the transfer of the total of the sales book into the general ledger recorded? | Dr. Receivables' ledger control account Cr. Sales Revenue |
| How is the transfer of the total of the Purchases day book into the general ledger recorded? | Dr. Purchases Cr. Payables' Ledger Control account |
| What is a memorandum with regards to control accounts? | A separate list of all the individual balances due from each customer and from each supplier in the receivables and payables. These are referred to as the "Ledgers". |
| What is the SDB? | Sales Day Book |
| What is the PDB? | Purchase Day Book |
| What is the SRDB? | Sales Returns Day Book |
| What is the PRDB? | Purchase Returns Day Book |
| What is the CB? | Cash Book |
| What can cause credit balances on the receivables control account? | Customers overpaying, Credit notes having been given for goods that are fully paid for, or Payments are received before an invoice is sent. |
| What should be done with a credit closing balance on the receivables account? | It should be transferred to the payables account. |
| What should be done with a debit closing balance on the payables account? | It should be transferred to the receivables account. |