Scribd
Upload
6 views2 pages

Trade Payables Control Account Overview

Short noted on control accounts and simple questions

Uploaded by

moominaaboobakuru31
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
6 views2 pages

Trade Payables Control Account Overview

Short noted on control accounts and simple questions

Uploaded by

moominaaboobakuru31
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

You work for a business that has over 1000 customers and over 500 suppliers.

Each of these has an


individual account in the trade receivable and trade payables ledger. If you wanted to know how
much was owed to you by customers, would this be easy to calculate? Could you quickly provide
this information?????

 The control accounts consist of summaries of the totals taken from books of prime entry.

 Advantages of control account:  Limitations of control account:

 Accuracy  Not all errors can be detected

 Improve the speed of decision making  The control account may contain errors

 Internal control (prevention of fraud)  Cost

Note:

How to know which side to take:

 Debit side Credit side


o Means adding to the total of trade o Means reducing the trade receivables
receivables balance. balance.

o Example: Once a sale occurs it o Example: Once we received a payment


increases the trade receivables. from trade receivable, it reduces the
balance they owe to us.
Note:

How to know which side to take:

 Debit side Credit side


o Means reducing to the total of trade o Means adding the trade payables
payables balance. balance.

o Example: Once we done a payment to o Example: Once a purchase occurs it


trade payables, it reduces the balance increases the trade payables.
we owe to trade payables.

You might also like