control accounts

Accounts in which the balances are designed to equal the aggregate of the balances on a substantial number of subsidiary accounts. Examples are the sales ledger control account (or total debtors account), in which the balance equals the aggregate of all the individual debtors' accounts, the purchase ledger control account (or total creditors account), which performs the same function for creditors, and the stock control account, whose balance should equal the aggregate of the balances on the stock accounts for each item of stock. This is achieved by entering in the control accounts the totals of all the individual entries made in the subsidiary accounts. The purpose is twofold: to obtain total figures of debtors, creditors, stock, etc., at any given time, without adding up all the balances on the individual records, and to have a crosscheck on the accuracy of the subsidiary records.

Accounting dictionary. 2014.

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