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What is the importance of receivables/payable control accounts? in the accounting softwares, there is a “Chart of Accounts” where individual receivables or payable ledgers are the sub-heads of the receivables or payable ledger head and in these accounting software, i have found that an entry which has an impact on the individual receivable or payable ledger, have also an impact on the receivable or payable ledger head. However, it is to note that no specific journal entry has to be posted in the receivable or payable ledger head. So, there should have no question of reconciliation.
I am really confused about the importance of receivable or payable control ledger and really wonder why ACCA has to include this chapter in the textbook.
Your response will be highly appreciated.
In future, if you wish for me to answer you must ask in the Ask the Tutor Forum. This forum is for students to help each other.
The ACCA does not publish textbooks, but control accounts (there is no such thing as a control ledger) are in textbooks because they are in the exam syllabus. They are important because most companies do use control accounts. The receivables control account shows the total receivables, but companies also need to know how must each individual customer owes which is why we also have a receivables ledger.
How these accounts operate and why is all explained in detail, with examples, in my free lectures on Books of Prime Entry.
The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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