Financial Accounting Notes

Control Account

Control accounts is the extraction of trial balance from individual ledger account of a large organization. Generally speaking, large organizations prepare different types of ledger accounts, but error might occur when preparing these ledgers. To locate the error easily individual trial balance need to be opened for each ledger account, anyone that fails to agree indicates that there are errors. Control account is an easy way to locate errors from ledger account. Control account is also called self balancing ledge.


  1. It helps in locating errors
  2. It saves time
  3. It can be used to detect missing figures
  4. Fraud becomes difficult when control accounts are prepared 
  5. It is used to check accuracy of balance of the ledgers
  6. The total debtors and creditors can be easily calculated.

Division of control accounts

Basically control accounts is divided into two: Sales Ledger Control Account and Purchases Ledger Control Accounts. 

  1. Sales Ledger Control Account: This account recorded all account debtors control account.
  2. Purchases Ledger Control Account: This account recorded all account of creditor. It is also called Total Creditors Control account.
Sales Ledger Control Account | Accounting, Accounting jokes, Control

Note: The closing balance of sale ledger control account represents debtors which will appear in balance sheet under current assets. While closing balance of purchase ledger control account represents creditors which will appear in balance under current liability.


  1. Define the term control account and mention two divisions of control account.
  2. Mention five advantages of control account.

Reading Assignment

Essential Financial Accounting by O.A. Longe 187-189


1    List seven types of errors a trial balance will not reveal

2    Explain the term apportionment in departmental accounts

3    List six uses of control account

4    Explain the components of prime cost

5    List five items found in the total creditors control account


  1. Another name for control account is (a) sale ledger (b) purchase ledger (c) self balancing ledger (d) general ledger.

Used the information and options provided, Under it to answer question


  • Credit Sales
  • Discount received
  • Return Outward
  • Credit Purchase

The above items are recorded under

(a)     Purchase ledger control account

(b)     General ledger control account

(c)     Proper Journal Control account

(d)     Sales Ledger Control account


Draw up the typical format of

(1) Total debtors control account

(2) Total creditors control account


1.       What is a control account?

2.       List four advantages of control account.

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