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Why may a control account carries both debit and credit balances?
Wiki User
∙ 11y ago
A control account summarizes a set of subsidiary accounts. For example, Accounts receivable may have a control account, representing total Accounts receivable, and also may have a set of subsidiary accounts, representing the amount of Accounts receivable owed by each customer/debtor. The total of all subsidiary accounts must equal the balance of the control account.
Control accounts will have debit or credit balances depending on the nature of those accounts. Control accounts for assets, such as Accounts receivable or Fixed assets, will have native debit balances. Control accounts for liabilities, such as Accounts payable, will have native credit balances.
Wiki User
∙ 11y ago
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Which accounts normally have credit balances?
All liabilities as well as sales account has credit balance as normal accounting balances.
Do revenues have a credit or debit balances?
Revenue is an Owners Equity account therefore has a Credit Balance:
Which account decreases when debit?
All those accounts decreases with debit which normal or default balances are credit for example all liabilities or incomes are decreased with debits because their default balances are credit balance.
Is retained earnings a normal debit or credit balance?
The retained earnings account usually carries a credit balance.
Does owners equity account balances in the credit side?
Yes. Owner's Equity is a credit and typically displays on the right side of a balance sheet.
Which accounts normally have credit balances?
All liabilities as well as sales account has credit balance as normal accounting balances.
Do revenues have a credit or debit balances?
Revenue is an Owners Equity account therefore has a Credit Balance:
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.
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.
Which account decreases when debit?
All those accounts decreases with debit which normal or default balances are credit for example all liabilities or incomes are decreased with debits because their default balances are credit balance.
Is retained earnings a normal debit or credit balance?
The retained earnings account usually carries a credit balance.
Does owners equity account balances in the credit side?
Yes. Owner's Equity is a credit and typically displays on the right side of a balance sheet.
Which of the following groups contain only accounts that normally have credit balances?
Salaries Expense and Account Payable
What is the difference between free credit report and credit score?
A free credit report is a list of your debt history. It shows all of your personal information, creditors, account balances, and paid-off balances. A credit score is basically just a rating given to you by credit card companies to show your standing with them.
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.
Can the secondary card holder on a credit card account transfer credit card balances to a new card?
No unless the primary gives the secondary permission too
What balances have debit or credit balances?
Assets, Expenses and Losses have native debit balances. Liabilities, Stockholders' equity, Revenues, and Gains have native credit balances.
