Control accounts are ledger accounts structured to equal the aggregate balances of a large number of subsidiary accounts, serving functions such as consolidating data and providing cross-verification of subsidiary record accuracy.
A specialized book of prime entry recording specific transactions, serving as a foundation for accurate bookkeeping and financial reporting.
An accounting system that maintains cost accounting and financial accounting information separately, regularly reconciling the two by use of control accounts.
Internal control encompasses measures that an organization implements to reduce opportunities for fraud or misfeasance. Examples include requiring multiple signatures on documents, enhancing security for stock handling, task division, maintaining control accounts, using special passwords, and handling computer files securely. It is crucial for internal audits to ensure the effectiveness of these controls to instill confidence in external auditors and management regarding the integrity of the organization’s operations.
The purchases ledger control account is a summary account within the general ledger used to record the total amount owed to suppliers and other creditors for goods or services received on credit.
