Accounting·Basic accounting systems · NSSCO 3.4
Debtors & Creditors Control accounts
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Who owes us, and who do we owe? In this lesson we draw up a Debtors List and a Creditors List straight from the subsidiary ledgers, then build a single summary account — the control account — that mirrors a whole ledger in the General Ledger. We'll enter every figure with its source book named, find the balance on one side, interpret it, and finally reconcile the list with the control account to prove the books are correct.
What you'll learn in this lesson
By the end you should be able to (NSSCO Accounting 3.4):
- Explain the purpose of Debtors and Creditors lists
- Draw up Debtors and Creditors lists from the Debtors and Creditors Ledgers respectively
- Explain the nature, purpose and advantages of control accounts
- Describe the Debtors Control account and the Creditors Control account
- State the sources of information for control accounts
- Prepare Debtors and Creditors Control accounts in the General Ledger (only a balance on one side is expected)
- Interpret control accounts
- Reconcile the List of debtors and List of creditors with their respective control accounts
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