Paper 2 · June 2018 · Control Accounts
Which of the following is a genuine benefit of preparing a sales ledger control account and a purchases ledger control account?
AIt helps identify posting errors by comparing the control account balance to the total of the individual ledger balances.
BIt calculates the total gross profit earned from credit sales after deducting the related cost of sales for the period.
CIt automatically corrects posting errors found in the individual customer accounts once they are identified.
DIt shows the individual balance owed by each credit customer, providing a full list of debtors' accounts for reference.
Explanation
A control account is an independent total built from source records (day books, cash book, journal). Comparing this independent total to the sum of the balances in the individual sales or purchases ledger accounts reveals whether an error has occurred in posting to the individual accounts, without needing to check every account line by line.
Derived from ZIMSEC Accounting Paper 2, June 2018, Q4