Financial Accounting · Sales and purchases

Sales and Purchase Ledger Control Accounts for ACCA FA

Updated 11 October 2026

A control account is a general ledger account that totals all the individual receivables (or payables) ledger accounts. You build it from the day book totals and cash book totals: opening balance, plus credit sales, less receipts, discounts, returns and irrecoverable debts, gives the closing balance. That closing balance should equal the sum of the individual ledger balances.

Understand Sales and Purchase Ledger Accounts and Control Accounts

Every credit sale creates a receivable: a customer who owes you money. Every credit purchase creates a payable: a supplier you owe. You need to know what each customer owes and what each supplier is owed. So you keep an individual account for each one. These accounts form the receivables ledger (sales ledger) and the payables ledger (purchases ledger).

The receivables and payables ledgers are subsidiary ledgers. They sit outside the double entry. Their job is detail: who owes what. The general ledger needs only the totals. So it holds one receivables ledger control account and one payables ledger control account. These accounts are part of the double entry and feed the trial balance and the statement of financial position.

The same transaction is therefore recorded twice in two different places. The day book total of credit sales is posted to the control account. Each individual invoice is posted to the customer's own account. If both are done correctly, the control account balance equals the total of the individual balances.

This is why control accounts are useful. If the two figures disagree, there is an error somewhere. A control account also helps detect fraud, and it gives a quick total for receivables or payables without adding up hundreds of accounts.

In the exam you are usually given a list of figures and asked to find the closing balance or a missing figure. You must know which items go on the debit side and which on the credit side, and which items are not recorded in the control account at all.

Key formulas to remember

Receivables ledger control account: Debit: opening balance, credit sales (gross, incl. sales tax), dishonoured cheques, refunds to customers, interest charged. Credit: cash and cheques received, discounts allowed, sales returns, irrecoverable debts written off, contra with payables ledger; Closing balance is the balance carried down. It should equal the total of the individual customer balances.
Payables ledger control account: Credit: opening balance, credit purchases (gross, incl. sales tax), refunds received from suppliers. Debit: payments made, discounts received, purchase returns, contra with receivables ledger; A payables balance is normally a credit balance. A refund received from a supplier is credited to the payables control account (Dr Cash, Cr Payables control account). It clears a debit balance on the supplier's account, for example after an overpayment, so it goes on the credit side.
Closing balance: Closing balance = opening balance + increases − decreases; Increases for receivables are credit sales, dishonoured cheques and refunds paid to customers. Increases for payables are credit purchases and refunds received from suppliers.
Contra entry: Dr Payables ledger control account, Cr Receivables ledger control account (for the amount set off); Used when a customer is also a supplier and the two balances are netted off.
Items not in control accounts: Cash sales and cash purchases are not part of ordinary control account totals. Credit purchases and sales of non-current assets are recorded in the journal, not in the purchases or sales day books, so they are excluded from the control accounts. The allowance for receivables is also never posted to the control account.; Irrecoverable debts written off are credited to the receivables control account. The allowance for receivables is a separate account and does not go through it.

How to solve Sales and Purchase Ledger Accounts and Control Accounts questions

Use the same layout every time. It stops you putting items on the wrong side.

1Read the question and decide whether it is the receivables or payables control account. Draw a T account and label it.
2Enter the opening balance on the normal side: debit for receivables, credit for payables. If the question gives an opening balance on the opposite side, enter it there.
3List each item and ask: does it increase or decrease what the customer owes (or what you owe)? Increases go on the normal side, decreases go on the opposite side.
4Ignore cash sales, cash purchases and allowances for receivables. Use gross figures including sales tax for credit sales and purchases, unless told otherwise.
5Watch for traps: dishonoured cheques, contras, irrecoverable debts, refunds and discounts allowed or received.
6Balance the account. If asked for a missing figure, use it as the balancing figure.
7If a reconciliation is needed, compare the control account balance with the list of individual balances and explain any difference.

Quickest way: Roll-forward in one line

When to use it: Use this for number entry or multiple choice questions where you only need the closing balance or a missing figure.

Write: opening balance + increases − decreases = closing balance.
Receivables: increases are credit sales, dishonoured cheques and refunds paid. Decreases are receipts, discounts allowed, returns and irrecoverable debts.
Payables: increases are credit purchases and refunds received from suppliers. Decreases are payments, discounts received, returns and contras.
Cross out items that do not belong, such as cash sales and allowances.
For a missing figure, put the unknown in the equation and solve it.

Common mistakes in Sales and Purchase Ledger Accounts and Control Accounts

Including cash sales or cash purchases in the control account
The list of figures in the question includes total sales, and students use it without checking.
Fix: Only credit transactions go in the control accounts. Use the credit sales figure given, or deduct cash sales from total sales.
Putting discounts allowed on the debit side
Students think of discounts as an expense, so they debit them.
Fix: In the receivables control account, discounts allowed reduce what customers owe, so credit them. The expense debit is in the general ledger, not here.
Posting the allowance for receivables to the control account
Students confuse irrecoverable debts and the allowance.
Fix: Irrecoverable debts written off are credited to the control account. The allowance is a separate account and never goes through it.
Ignoring sales tax
The net sales figure is used when the gross invoice total is needed.
Fix: Customers owe the gross amount. Use the total including sales tax unless the question says otherwise.
Getting dishonoured cheques the wrong way round
A cheque received was credited. Students forget that when it bounces the customer owes again.
Fix: Debit the receivables control account with a dishonoured cheque, because the customer's debt is reinstated.
Treating contras as a simple cash item
No cash moves, so students ignore it or record it on one account only.
Fix: A contra reduces both balances. Credit the receivables control account and debit the payables control account.

Worked examples

Example 1

At 1 May the receivables ledger control account had a debit balance of $48,200. During May: credit sales were $96,500 (including sales tax), cash received from customers was $88,400, discounts allowed were $1,300, sales returns were $2,700, irrecoverable debts written off were $900, and a customer's cheque for $1,600 was dishonoured. Cash sales of $14,000 are also in the sales records. Calculate the closing balance.

Show the solution

Opening balance (debit): $48,200.
Add debits: credit sales $96,500 and dishonoured cheque $1,600. Total additions are $98,100.
Cash sales of $14,000 are ignored as they are not credit sales.
Deduct credits: receipts $88,400, discounts allowed $1,300, returns $2,700 and irrecoverable debts $900. Total is $93,300.
Closing balance = 48,200 + 98,100 − 93,300 = $53,000.

Answer: Closing balance is a debit of $53,000.

Example 2

At 1 June the payables ledger control account had a credit balance of $31,400. During June: credit purchases were $52,800, payments to suppliers were $47,600, discounts received were $1,100, purchase returns were $2,300, and a contra was made with the receivables ledger for $900. The sum of the individual payables ledger balances at 30 June is $32,100. Find the closing control account balance and the difference.

Show the solution

Opening balance (credit): $31,400.
Add credit purchases: $52,800. Subtotal is $84,200.
Deduct debits: payments $47,600, discounts received $1,100, returns $2,300 and contra $900. Total is $51,900.
Closing balance = 84,200 − 51,900 = $32,300 credit.
Compare with the list total of $32,100. Difference = 32,300 − 32,100 = $200.

Answer: The control account balance is a credit of $32,300, which is $200 higher than the ledger list total of $32,100. The difference must be investigated.

Exam tips

Draw the T account every time, even for a number entry question. It takes seconds and stops side errors.
Look for the distractors: cash sales, allowance for receivables and sales tax wording. They are the usual traps.
In a multiple response question about items on the credit side of the receivables control account, check receipts, discounts allowed, returns and irrecoverable debts.
If the question asks for a missing figure, such as credit sales, make it the balancing figure after entering everything else.
Check the sign of the opening balance. A credit balance in receivables (customer overpaid) must go on the credit side.

Practice questions from Sales and purchases

Sales and Purchase Ledger Accounts and Control Accounts: frequently asked questions

What is the difference between a control account and a subsidiary ledger?

A subsidiary ledger holds the individual customer or supplier accounts, with a detailed record of each one. A control account is a single general ledger account that records the totals. The control account is part of the double entry. The subsidiary ledger is not.

Why do we prepare control accounts?

They give a total for receivables or payables without adding every account. They help find errors, because the control balance should agree with the sum of individual balances. They also make fraud harder, because one person cannot easily hide changes in both.

What do I do if the control account does not agree with the ledger list?

Find the cause of the difference. Common causes are a wrongly totalled day book, an item posted to the wrong customer account, or an entry missed from one record. Correct the control account or the individual accounts as needed, then recheck that the balances agree.

Does a contra entry affect the control accounts?

Yes. A contra sets off an amount owed by a customer against an amount owed to the same person as a supplier. It is credited to the receivables control account and debited to the payables control account. No cash moves.