1. CONTROL
ACCOUNTS

2. (The books of PRIME entry)
Recall …
The Accounting Cycle
(The first 4 steps)
Documents
Journals
(The books of PRIME entry)
Ledgers
Trial Balance

3. GENERAL LEDGER Capital (Owner’s equity) Expenses Revenues
Assets (except T/R’s)
Liabilities (except T/P’s)
SALES LEDGER
(Debtors Ledger)
PURCHASES LEDGER
(Creditors Ledger)
T/Rs’ accounts
T/Ps’ accounts

4. (or Sales Ledger Control A/c) (or Purchases Ledger Control A/c)
CONTROL ACCOUNTS
Debtors Control A/c
(or Sales Ledger Control A/c)
Creditors Control A/c
(or Purchases Ledger Control A/c)
TOTALS of all a/cs
relating to T/R’s;
Summarizes all transactions with T/R’s
relating to T/P’s;
Summarizes all transactions with T/P’s

5. A typical T/R’s account ...
John Tan Dr Cr $
Jan 1 Balance b/d
31 Sales
Dishonoured cheques
Discount withdrawn
Any other charges
Feb 1 Balance b/d $
Jan 31 Bank / Cash
Sales returns
Discount allowed
Bad debts
Balance c/d

6. Debtors Control AccountDr Cr $
Jan 1 Balance b/d
31 Sales
Dishonoured cheques
Discount withdrawn
Any other charges
Feb 1 Balance b/d $
Jan 31 Bank / Cash
Sales returns
Discount allowed
Bad debts w/o
Balance c/d
TOTALS

7. A typical T/P’s account ...
ABC Pte Ltd Dr Cr $
Jan 31 Bank / Cash xx
Purchases returns xx
Discount received xx
Balance c/d xx $
Jan 1 Balance b/d xx
31 Purchases xx
Carriage inwards xx
Any other charges xx
Feb 1 Balance b/d

8. Creditors Control AccountDr Cr
2001
Jan 31 Bank / Cash
Purchases returns
Discount received
Balance c/d
2001
Jan 1 Balance b/d
31 Purchases
Carriage inwards
Any other charges
Feb 1 Balance b/d
TOTALS
TOTALS

9. Sources of Information
Even though the Control Accounts reflect the
total of each item,
entries in the Control Accounts are NOT
taken from the individual T/R’s or T/P’s accounts.

10. X That is, we should NOT be under impression that ... because
therefore
Debtor A
Sales 500
Debtor B
Sales 800
Debtor C
Sales 400
Debtors Control Account
Sales 1,700 X

11. What are the books of prime entry?
But rather ...
The entries in the Control Accounts
are made up of TOTALs obtained
from BOOKS OF PRIME ENTRY
What are the books of prime entry?

12. For example, Debtor A Sales 500 Sales Ledger Sales Journal Date Amt$
Debtor A
500
Debtor B
800
Debtor B
Sales 800
Debtor C
400
Debtor C
Sales 400
Sales Account
1,700
Debtors Control Account
Sales 1,700

13. Sources of Information
Debtors Control Account

14. Sources of Information
Debtors Control Account

15. Sources of Information
Creditors Control Account

16. Sources of Information
Creditors Control Account

17. Can you think of other examples?
Transfers or Contras
Sometimes, a CUSTOMER of a business
also happens to be a SUPPLIER.
For example,
A business selling cloth also buys Singapore
flags from a flag manufacturer.
Can you think of other examples?

18. How should the accounts be presented
For example,
Silky Co. sold $500 worth of cloth to
Singaflag Pte Ltd in July During
the same month, Silky Co. also bought
$200 worth of Singapore flags from
Singaflag Pte Ltd.
How should the accounts be presented
in Silky Co.’s books?

19. Silky Co. SALES LEDGER Singaflag Pte Ltd $ Sales 500 Transferred from
PURCHASES LEDGER
Purchases
Silky Co.
Transferred from
Purchases Ledger
Balance c/d
500
Balance b/d 300
Transferred to
Sales Ledger

20. NOTE 1. The SMALLER amount is transferred.
2. The DEBTOR is always CREDITED
and the CREDITOR is always DEBITED.

21. Silky Co. sold $500 worth of cloth to
Singaflag Pte Ltd in July During
the same month, Silky Co. also bought
$200 worth of Singapore flags from
Singaflag Pte Ltd.
How should the accounts be presented
in Silky Co.’s books?
What about Singaflag Pte Ltd’s books?

22. Singaflag SALES LEDGER Silky Co. $ Sales 200 Transferred to
PURCHASES LEDGER
Purchases
Singaflag
Transferred to
Purchases Ledger
Transferred from
Sales Ledger
Balance c/d
500
Balance b/d

23. Transfers or Contras always appear on the
CREDIT side of the Debtors Control Account
and DEBIT side of the Creditors Control Account
Debtors Control Account Dr Cr
Creditors Control Account
Transfers or Contras

24. When will such situations happen?
Unusual Balances
At times, some debtors may have small credit balances and creditors may have small debit balances.
When will such situations happen?

25. For example,
Some debtors returning empty containers /
defective goods for which they have been charged.
Or, some debtors may have been overcharged.
When there is no or insufficient debit balances
to offset this credit items, these debtors will
have credit balances for the time being.

26. C Tan Eg. A debtor, C Tan, has settled his account of
$500. Subsequently, he returns empty
containers to the value of $10.
C Tan Dr Cr
2002
Jan 1 Balance
31 Balance c/d
510
Jan 10 Cash
25 Returns
Feb 1 Balance b/d 10 $