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Why is it C NOT B?
Which one of the following is not the purpose of a receivables ledger control account?
B A receivables ledger control account helps to locate errors in the trial balance
C A receivables ledger control account ensures that there are no errors in the personal ledgerThe answer is C.
I know that the control account helps prep of trial balance easier etc but how come it can locate errors in a trial balance?
Any thoughts?
If you watch the lectures on Books of Prime Entry, then you will see that the double entries are to the Receivables Ledge Control Account. It is not the purpose of any of the t-accounts to find errors in the trial balance.
(Certainly if an entry is made wrongly, the trial balance will not balance, but that is not the purpose of the t-accounts.)The purpose of the control account is to serve as a check (control) on the individual balances in the receivables ledger.
Yes, I agree.
But the question asks for the statement which is *not* the purpose of the control account. The answer is C, so I wanted to know how, seeing as C is right (that is, is NOT the purpose), how B is wrong (that is, how can it be a purpose?). I also thought that the answer should be B ie the account doesn’t locate errors in the Trial Balance.
And I’d like to thank you overall for your immense help! It means a lot. 🙂
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