- Controlling account
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In accounting, the controlling account (UK: control account; also known as adjustment account[1]) is an account in the general ledger for which a corresponding subsidiary ledger has been created. The subsidiary ledger allows for tracking transactions within the controlling account in more detail. Individual transactions are posted both to the controlling account and the corresponding subsidiary ledger, and the totals for both are compared when preparing a trial balance to ensure accuracy.
For example, Accounts Receivable is the controlling account for the Accounts Receivable Subsidiary Ledger. In this subsidiary ledger, each credit customer has their own account with their own balance. Thus, while the Accounts Receivable balance can report how much the company is owed, the Accounts Receivable subsidiary ledger can report how much is owed from each credit customer.
Other examples of controlling accounts and their subsidiary ledgers include Accounts Payable (accounts payable subsidiary ledger) and Equipment (equipment subsidiary ledger).[2]
References
- ^ control account definition in Financial Times lexicon
- ^ Jones, Jefferson; Nikolai, Loren A.; Bazley, John D. (2009). Intermediate Accounting. [Cincinnati, Ohio]: South-Western College Pub. p. 102. ISBN 0-324-65913-X.
Categories:- Accounting systems
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