Types of Control Accounts:
A brief description about different control accounts are given below:
Stores Ledger Control Accounts:
This accounts reveals the value of stores received, issued and balances in hand. Receipts are posted from goods received posted on the basis of material requisition in the credit side of the account. The balance of this account represents the total balance of stock which should agree with aggregate of the balance of individual accounts in the stores ledger.
Wage Control Account:
This accounts records labour transactions in aggregate. It is debited with gross wages shown in wages analysis sheet. It is closed by transfer of direct labour to work in progress and indirect labour to overhead.
Work-in-progress Control Account:
It represents the total WIP at any time. It is debited with the totals of materials, wages and overheads as transferred from the respective control accounts. The completed job will be credited in this account. Thus, this account shows the shows the total value of unfinished jobs.
Works Overhead Control Account:
It deals with factory overhead expenses in aggregate. It is debited with the amount of indirect material, indirect material analysis and wage analysis sheets. It is credited with the amount of overheads, recovered, as obtained from the applied overhead analysis sheets. The balance represents under or over absorption which is transferred to overhead adjustment account.
Administrative Overhead Control Account:
It is debited with the administration overhead incurred and credited with the amount of administrative overhead absorbed by finished goods. The balance represents under or over absorption of administrative overhead which is transferred to overhead adjustment account.
Setting and Distribution Overhead Control Account:
It is debited with the amount of selling and distribution overhead incurred and credited with overhead aabsorbed by cost of sales. Balance represents under / over absorption.
Cost of Sales account:
It is debited with the cost of goods sold by transfer from finished goods ledger control and also by the selling distribution overhead absorbed. It is closed by transferring its balance to costing profit and loss account.
Costing Profit and Loss Account:
It is debited with the cost of sales, abnormal losses and under absorbed overhead and credited with sales value, abnormal gain and over-absorbed overhead. Balance represents profit or loss which is transferred to cost ledger control account.
Cost ledger control account or General ledger Adjustments A/c:
It is maintained to make the cost ledger self-balancing. The main object of this account is to complete double entry in cost accounting. All the financial transactions on account of material purchases, wages, salaries and miscellaneous expenses are credited to cost ledger control account by contra debit to various control accounts. All financial receipts are debited to this account. The balance is this represents the total of the balance of all personal accounts in the financial ledger.
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