ZIMSEC O Level Principles of Accounts Notes: Sales Control Accounts
- Sales control accounts present a summarized version of what should be in the Sales Ledger in a given period
- Below is a typical Sales Control Account:
| Sales Control Account | ||||||
| Date | Details | Amount($) | Date | Details | Amount($) | |
| 1 January | Balance b/d | xxx | 31 December | Sales Returns | xx | |
| 31 December | Sales | xxx | 31 December | Discount Allowed | xxx | |
| 31 December | Interest on debts | 31 December | Bad Debts | xxx | ||
| 31 December | Set Off | xxx | ||||
| 31 December | Cash/Bank | xxx | ||||
| 31 December | Balance c/d | xxx | ||||
xxxxx | xxxxx |
|||||
- The exact look of the sales control account obviously depends on the nature of transactions involved
Sources of information when preparing
| Sales Control Item | Source |
|---|---|
| Opening debtor's balances | List of debtors’ balances drawn up at the end of the previous period |
| Credit sales for the period | Total from the Sales Day Book |
| Sales Returns | Total of Returns Inwards Day Book |
| Cheques Paid/Bank Receipts | Cash Book: bank column on received side/ Bank Statement |
| Cash Received | Cash Book: cash column on received side. |
| Discount Allowed | Total of discounts allowed column in the Cash Book |
| Closing debtor's balance | List of debtors’ balances drawn up at the end of the period |
- It is possible that some of our creditors are also our debtors
- These creditors may agree with the business to write off outstanding balances
- For example we bought goods worth $1000 from J Moyo during the year
- This is shown in J Moyo’s purchases account in the Purchases Ledger
- We also sold goods worth $300 during the year to the same J Moyo
- This is shown as a sale in J Moyo’s Account in the Sales Ledger
- Instead of the business paying J Moyo $1000 and receiving $300 we can just pay the difference $700
- A Contra entry/Set Off is used to show that part of the debt has been written/knocked off
- Contrasting entries will be shown in the Purchases Control Account (Debit Side) and Sales Control Account (Credit)
- These are often described as Contra (short for contrasting) entries/ Set Off entries
- Also the Sales Control/Sales Ledger Control should not be confused with the Sales Account
- The Sales Account has a credit balance while the Sales Ledger Control usually has a larger debit balance
- The Sales Account includes both cash and credit sales
- The Sales Ledger is merely a summary view of the Accounts Receivable Ledger and only includes credit sales
To access more topics go to the Principles of Accounting Notes.
