Control accounts are summary accounts that check the accuracy of the sales and purchases ledgers.
The sales ledger control account totals amounts owed by customers; the purchases ledger control account totals amounts owed to suppliers. Its closing balance should equal the total of the individual ledger balances. Closing balance = opening + credit sales − receipts (− returns, − discounts).
Remember
- Sales ledger control = receivables; purchases ledger control = payables.
- The control account balance should match the ledger total.