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level: Control Accounts and Reconciliations

Questions and Answers List

level questions: Control Accounts and Reconciliations

QuestionAnswer
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.