Control Account Terminologies - SS1 Accounting Past Questions and Answers - page 1
What is a control account?
A summary account in a company's general ledger
A detailed account in a company's general ledger
An account used for personal expenses
An account used for tax purposes
What is the purpose of a trial balance?
To list the balances of all the accounts in the general ledger
To ensure that the total debits equal the total credits
To track specific transactions and balances
To reconcile the balances in the control account
What is the difference between a debit and a credit?
Debits increase assets and expenses, while credits increase liabilities, equity, and revenue
Debits increase liabilities, equity, and revenue, while credits increase assets and expenses
Debits and credits have the same effect on the general ledger
Debits and credits are used for tax purposes only
What is the process of comparing the balances in the control account to the balances in the sub-accounts to ensure they match?
Trial balance
Reconciliation
General ledger
Sub-accounting
What is the purpose of a control account?
To provide a high-level overview of the company's financial position
To track specific transactions and balances
To reconcile the balances in the general ledger
To list the balances of all the accounts in the sub-ledger
Define a control account and explain its purpose.
A control account is a summary account in a company's general ledger that aggregates the balances of a group of related sub-accounts. Its purpose is to provide a high-level overview of the company's financial position and to identify any errors or discrepancies that need to be corrected.
What is the difference between a positive balance and a negative balance in an account?
A positive balance means there are more debits than credits in the account, while a negative balance means there are more credits than debits.