Lesson Questions - Control Accounts

The purposes of purchases ledger and sales ledger control accounts are:

• To record a summary of transactions with suppliers and customers

• To provide a summary of all transactions in the general ledger

• To ensure accuracy and completeness of financial records

• To facilitate the preparation of financial statements

Identify the books of prime entry as sources of information for the control account entries.

• Sales Journal, Purchases Journal, Cash Book

• General Ledger, Trial Balance, Statement of Financial Position

• Income Statement, Cash Flow Statement, Statement of Financial Position

• Journal, Ledger, Trial Balance

Fill in the blank: Control accounts are used to compare ______ and ______.

• Control accounts are used to compare sales ledger balances with purchases ledger balances

• Control accounts are used to compare sales ledger balances with the balance of the sales ledger control account

• Control accounts are used to compare assets and liabilities.

• Control accounts are used to compare cash flow and net income.

What are control accounts used for in the general ledger?

• To summarize accounts

• To check the accuracy of ending amounts in the Sales Ledger and/or Purchases Ledger

• To prepare financial statements

• To audit accounts

The information to prepare the Purchases Ledger Control account comes from the totals of which books of prime entry?

• Purchases journal

• Purchases returns journal

• Cash book

• General journal

Fill in the blank: The ending balance of the Purchases Ledger Control A/c is used to verify the accuracy of the sum of individual trade payables/credit suppliers accounts in the ________ at close.

• Purchases Ledger

• Sales Ledger

• General Ledger

• Cash Book

What type of document is recorded in the Purchases Journal?

• A) Credit note issued

• B) Invoice received

• C) Goods sold on credit

• D) Sales returns

In the Purchases Returns Journal, what is the business document received?

• Invoice issued

• Credit note received

• Goods sold on credit

• Sales returns

Fill in the blank: The Sales Journal total is posted to the CR of _______ in the NL/GL at the end of the month.

• Sales A/c

• Purchases A/c

• Cash A/c

• Inventory A/c

What is the posting to the General Ledger for cash and cheques received from credit customers in the Cash book?

• A) DR SLCA

• B) CR SLCA

• C) DR PLCA

• D) CR PLCA