Control accounts will be memorandum records and could include contra entries, interest charged on overdue accounts, debit balances in purchases ledger, credit balances in sales ledger
A control account is a summary record that checks the total of a ledger. It can contain unusual entries such as contra entries, interest charges, and balances on the wrong side.
Real World
A small retailer who both supplies goods to and buys goods from the same wholesaler can set off the two balances against each other via a contra entry, reducing the amount of cash that needs to change hands.
Exam Focus
A contra entry debits the purchases ledger control account and credits the sales ledger control account — never the other way.
Essay Framework
Use PEEL to structure every paragraph. Tap each step for guidance and an example.
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