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Why does the sales ledger control account has both debit and credit balances?
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What is control account control account?
A control account is a summary of the individual accounts in the subsidiary ledger(purchases or sales ledger) :)
Why are cash sales not recorded in the sales ledger control account?
a ledger account if made for credit sales.
There are two types of control account what are they?
sales ledger control account and purnchase ledger control account
Which account represents a debit balance on a ledger account?
assets have debit balances.
What does a credit balance in the purchase ledger control account represent?
Indicates monies owed to suppliers.
How is subsidiary ledger different to the general ledger?
A subsidiary ledger is a group of similar accounts whose combined balances equal the balance in a specific general ledger account. The general ledger account that summarizes a subsidiary ledger's account balances is called a control account or master account. For example, an accounts receivable subsidiary ledger (customers' subsidiary ledger) includes a separate account for each customer who makes credit purchases. The combined balance of every account in this subsidiary ledger equals the balance of accounts receivable in the general ledger. Posting a debit or credit to a subsidiary ledger account and also to a general ledger control account does not violate the rule that total debit and credit entries must balance because subsidiary ledger accounts are not part of the general ledger; they are supplemental accounts that provide the detail to support the balance in a control account.
What is control account control account?
A control account is a summary of the individual accounts in the subsidiary ledger(purchases or sales ledger) :)
Why are cash sales not recorded in the sales ledger control account?
a ledger account if made for credit sales.
Why are control account balances reported in external financial statements while subsidiary account balances are not?
A control account is a summary account in the general ledger. The details that support the balance in the summary account are contained in a subsidiary ledger-a ledger outside of the general ledger. The purpose of the control account is to keep the general ledger free of details, yet have the correct balance for the financial statements. For example, the Accounts Receivable account in the general ledger could be a control account. If it were a control account, the company would merely update the account with a few amounts, such as total collections for the day, total sales on account for the day, total returns and allowances for the day, etc. The details on each customer and each transaction would not be recorded in the Accounts Receivable control account in the general ledger. Rather, these details of the accounts receivable activity will be in the Accounts Receivable Subsidiary Ledger. This works well because the employees working with the general ledger probably do not need to see the details for every sale or every collection transaction. However, the sales manager and the credit manager will need to know detailed information on individual customers, including whether a customer recently reduced their account balance. The company can provide these individuals with access to the Accounts Receivable Subsidiary Ledger and can keep the general ledger free of a tremendous amount of detail. Sourced: http://blog.accountingcoach.com/accounts-receivable-control-account-subsidiary-ledger/ (second result after googling "Control account balances and Subsidiary account balances" ps: lrn2google)
Why are control account balances reportedd in external financial statements while subsidiary accounts balances are not are subsidiary accounts useful to anyone?
A control account is a summary account in the general ledger. The details that support the balance in the summary account are contained in a subsidiary ledger. The purpose of the control account is to keep the general ledger free of details, yet have the correct balance for the financial statements. The details on each customer and each transaction are recorded in the subsidiary account. Hence, subsidiary account balances are not reported in financial statements because it is not necessary to see the details for every sale or every collection transaction. Yes, subsidiary account balances are useful to the sales manager and the credit manager who will need to know detailed information on individual customers, including whether a customer recently reduced their account balance.
There are two types of control account what are they?
sales ledger control account and purnchase ledger control account
What is guest ledger?
A subsidiary ledger related to the accounts receivable general ledger account used by hotels to record the individual account activity of guests who are still at the hotel. The total of the balances in the city ledger plus the total of the balances in the guest ledger should equal the balance in the accounts receivable general ledger account.
Debit balance in the sales ledger set off against credit balances in the purchase ledger?
Its a contra settlement. for sales ledger control a/c ...we put contra settlement in the Cr side and in purchases ledger control a/c ..we put contra settlement in the Dr side
What is the normal balance of an account in the accounts payable subsidiary ledger?
Accounts receivables has debit balance as normal balance of account and shown in current assets in balance sheet.
Which account represents a debit balance on a ledger account?
assets have debit balances.
What does a credit balance in the purchase ledger control account represent?
Indicates monies owed to suppliers.
How can you compute the average ledger balance and average collected balance on your bank statement?
Ledger balances are those listed on the bank's books, while collected balances equal ledger balances minus float associated with the account.
