What is a Control Account?

Definition: A summary account in the General Ledger.

The purpose of the control account is to keep the general ledger nice and clean without any details, yet contain the correct balances to be used in the financial statements.

Many of the accounts seen in the financial statements, take cash for instance, is shown as the control account in the balance sheet. Behind the scenes however, there are numerous calculations of cash going in and out that are recorded in a subsidiary ledger.

In this way, the general ledger is spared of details such as where the cash came from, who it came from, the date it was paid, etc.

The ending balances will show up in the Balance Sheet:

  • Debtor--> 10,700 as a debit
  • Creditor--> 12,900 as a credit

The control account

It is the most up-to-date balance of a particular account at a given time. It can be considered the bottom line for a specific account, which is then transferred over to the balance sheet or income statement depending on the type of account.