Control Accounts: Meaning, Advantages and Formats

In this article we will discuss about Control Accounts:- 1. Meaning of Control Accounts 2. Advantages of Control Accounts 3. Formats.

Meaning of Control Accounts:

Control Accounts are the total accounts in the cost ledger which summarizes the totals of individual accounts (subsidiary ledger). In these accounts, entries are made once at the end of each accounting period based on the periodical totals of transactions in related subsidiary ledgers and books.


Control accounts act as a double check on the accuracy of the analysis. The balance of the control account at any time should equal to the sum of the balances of all individual accounts in subsidiary ledger.

For example, purchases of individual items of stores appearing in individual accounts in the stores ledger are totaled and posted in Stores Ledger Control Account in the cost ledger as total purchases. Thus, Stores Ledger Control Account is stores ledger in a summary form.

Similarly, a control account is also maintained for each of the other subsidiary ledger. The objective of opening a control account for cost ledger is to complete the double entry and to make the cost ledger self-balancing.

Advantages of Control Accounts:

(i) Control accounts provide a summary of transactions recorded in various subsidiary ledger. Hence these are very useful to management in policy formulation.

(ii) It makes possible the division of accounting work among ledger keepers, thereby resulting in specialisation in work.

(iii) It facilitates prompt preparation of profit and loss account and balance sheet at the end of each period by providing stock figures quickly.


(iv) It provides internal check leading to greater accuracy of records. and

(v) It provides a basis for reconciliation of cost and financial accounts.

Formats of Control Accounts under Non-Integrated Accounting:Formats of Control AccountsFormats of Control AccountFormats of Control Account

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