Control Accounts

A Trial Balance is said to be a statement of proof done arithmetically to prove that proper double was observed in making accounting entries. The assumption is that the Trial balance totals will not agree whenever there is an error. With the division of accounting records into different books of entries it becomes difficult to identify a specific accounting error due to the number of books to search. What is needed is a form of Trial balance for each ledger so that only those ledgers with errors need searching. This simplifies the accounting work. This need is met by Control Accounts.

A Control Account is a general ledger account that provides summarized information on the detailed balances of the individual records maintained in a subsidiary ledger. Subsidiary Ledgers provide the detail information about what makes up the balance in the control account.

Uses of Control accounts

-Assist in locating errors example in books like the sales ledger and purchases ledger.

-Minimizes fraud by assisting the scrutiny of records.

-Acts as an aid to management by providing summarized accounting information.

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