ajspalia

 Profile Answers by ajspalia 

• Nov 12th, 2008

 

A control account in GL is a summary of sub ledger accounts that can not be represented individually in GL because of thier huge numbers e.g. the number of vendors for a company can be numerous and it may not be practical to fit them directly into GL. Hence a subsidiary ledger is separately maintained for all the vendors and a control account is opened in GL to represent thier net debit/credit balances to form the part of final accounts. The most common practice is to  pass a monthly closing balance entry of such sub ledgers into GL control account and the balance of this account is then treated as liability or asset in the BS depending on the nature of account and the type of balance whether DR or CR.

Anoopjeet