They are especially important for reconciliation in large companies with a high volume of transactions when only the balance of the account is needed. The following errors have been discovered since the sales ledger control account was prepared. With the double-entry accounting system, accounts receivable, and accounts payable are the common types of control accounts.

• The purchase ledger is part of the accounting department’s database; it is not maintained by the purchasing department.
• Day books are just a list of credit transactions (in this case goods and services purchased) and are not part of the double entry process.
• If it does not, then there is an error somewhere in the books that must be corrected.
• So, we should not obtain the information required to prepare this control account from the Sales ledger (Debtors ledger),  instead all the information required should be obtained from books of original entry or prime entry.
• The nominal ledger is where we use our double entry bookkeeping system, so every transaction will impact on at least two ledger accounts.
• To speed up the error detecting process,
  we should have kind of a trial balance for each ledger.

The purchase ledger control account is used to keep from cluttering up the general ledger with the massive amount of information that is typically stored in the purchase ledger. Immediately after posting, the balance in the control account should match the balance in the purchase ledger. Since no detailed transactions are stored in the control account, anyone wanting to research purchase transactions will have to drill down from the control account to the purchase ledger to find them.

Accounting records

The primary document recorded in the purchase ledger is the supplier invoice. Also, if suppliers grant a credit back to the business for such items as returned goods or items damaged in transit, then you also record credit memos issued by suppliers in the purchase ledger. A credit memo may also be issued for a volume discount, though this credit may apply to a number of purchases in aggregate, and so cannot be traced back to an individual purchase transaction. C) Prepare a Statement altering the total of the sales ledger balance to agree with the new sales ledger control account balance. The total of Mary Rose’s sales ledger balances is £9387, which differs from the closing balance in the sales ledger control account.

In a small business the accounts can be kept in one accounting general ledger and a trial balance can be extracted from that ledger. The subsidiary ledgers are now part of the double entry system, and to extract a trial balance it would be necessary to collect information on the balances from each of the ledgers. In order to avoid this situation the general ledger maintains control accounts for each of the subsidiary ledgers.

Bookkeeping

Both Purchases and Sales Ledger Control Accounts check the arithmetical accuracy of the
individual accounts in their respective ledgers. However, errors which do not affect the trial
balance such as Errors of omission, Errors of commission, Errors of complete
reversal etc can not be located by using these accounts. Therefore he’ll need to look at Emily’s individual account in the purchase ledger, which will show him the details of all the transactions that have taken place between them. The nominal ledger is where all of the individual ledger accounts are gathered and is also sometimes called the ‘main ledger’ or the ‘general ledger’. The reconciliation should be performed on a regular basis by the sales ledger clerk, then reviewed and approved by an independent person. They must also ensure that the amount listed in the control account is the total of each of the amounts owed by a business to each supplier.

Within these accounts, you’re going to record any and all transactions. These will include purchase invoices, purchase credit notes and any payments that have been made. They would write up the purchase invoices and any payments in a thick leather-bound book. The total amount of invoices that get included within the purchase ledger that haven’t been paid are important for trade creditors.