Y10 Accounting - C16 Control Accounts

What is the purpose of control accounts?

• To track inventory levels

• To manage payroll

• To prepare tax returns

• To summarize all accounts of trade receivables and payables

What is another name for control accounts?

• Total accounts

• Summary accounts

• Ledger accounts

• Trial accounts

Which of the following is a source of information for the sales ledger control account?

• Cash book

• General journal

• Sales return journal

• Purchases journal

What does a sales ledger control account summarize?

• All transactions of trade payables

• All transactions of trade receivables

• All transactions of cash sales

• All transactions of fixed assets

Which of the following is NOT an advantage of control accounts?

• Proof of arithmetical accuracy

• Assist in locating errors

• Increase the number of transactions

• Help reduce fraud

What is a typical characteristic of a purchases ledger control account?

• It is used for cash transactions only

• It is prepared only annually

• It contains transactions for all creditors

• It contains transactions for all debtors

What happens if the trial balance fails to balance?

• No action is needed

• Check all accounting records

• Prepare a new trial balance

• Ignore the discrepancy

What is a contra entry?

• A method of calculating interest

• A type of error in accounting

• A summary of financial statements

• An inter-ledger transfer or set-off

What should the total of the balances on individual credit customers' accounts agree with?

• The total sales for the period

• The cash balance

• The total purchases for the period

• The balance on the control account

What is the usual balance in a sales ledger control account?

• Negative balance

• Zero balance

• Debit balance

• Credit balance