The reasons for having control accounts are as follows:
one.Check out on the accuracy
They give a check out on the accuracy of entries produced in the private accounts in the product sales ledger and obtain ledger. It is very easy to make a mistake in putting up entries, due to the fact there might be hundreds of entries to make. Minecraft account dispenser might get transposed. Some entries may possibly be omitted altogether, so that an bill or a payment transaction does not appear in a personalized account as it must. By comparing:
o The overall balance on the debtors account with the whole of specific balances on the private accounts in the product sales ledger.
o The total equilibrium on the creditors account with the complete of personal balances on the personal accounts in the obtain ledger.
It is attainable to discover the fact that problems have been manufactured.
two.Place of problems
It could also help in the spot of mistakes, where posting to the management accounts are produced everyday or weekly, or even monthly. If a clerk fails to report an bill or a payment in a individual account, or tends to make a transaction error, it would be a formidable task to find the error or mistakes at the stop of a calendar year, say, presented the hundreds or countless numbers of transactions during the calendar year.
By utilizing the management account, a comparison with the person balances in the sales or buy ledger can be produced for every 7 days or working day of the month, and the error identified a lot far more speedily than if accounts did not exist.
3.For inside check out
The place there is a independent of clerical bookkeeping responsibilities, the manage account gives an internal examine. The particular person submitting entries to the accounts will act as verify on a various person whose job it is to put up entries to the revenue and obtain ledger accounts.
4.A lot more basically and swiftly
To offer debtors and creditors balances a lot more rapidly for producing a demo harmony or harmony sheet. A solitary balance on a control account is certainly predicted easier and quickly than a lot of specific balances in the product sales or obtain ledger.
This means also that the amount of accounts in the double entry bookkeeping technique can be retained down to a workable dimensions, considering that the private accounts are memorandum accounts only and the control accounts alternatively provide the accounts needed for a double entry system.