A control account is a single general-ledger account that summarises many individual accounts. The sales ledger control account (SLCA) shows the total owed by all credit customers; the purchases ledger control account (PLCA) shows the total owed to all credit suppliers. Because the individual customer and supplier accounts in the sales and purchases ledgers are memorandum records, the control account is the number that appears in the trial balance and, ultimately, the financial statements.
Regularly reconciling the control account balance to the total of the individual balances catches errors quickly. If SLCA says customers owe £42,830 but the list of sales ledger balances totals £42,650, something is wrong in one place or the other and you need to find it before it flows into a customer statement or a VAT return.
What typically causes differences
Missed postings, a customer receipt entered in the cash book but never posted to the customer's account. An invoice recorded in the day book but written into the wrong customer's account. A discount allowed recorded in one place only. Contra entries missed on one side. Casting errors when totalling the list of balances.
| Error is in | How you fix it |
|---|---|
| Control account (general ledger) | Post a journal to adjust the control account |
| Sales/purchases ledger (memorandum) | Correct the individual customer/supplier account directly |
| Both, a duplicated entry | Reverse from both sides |
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