A control account is a summary account in the general ledger that stands in for the detail held in a subledger. Its balance should always equal the sum of all the individual accounts in that subledger.
What it means
Rather than carry every customer or supplier in the general ledger, a business keeps one debtors control or creditors control account there, with the per-party detail in a subledger. The control account gives the headline figure; the subledger gives the breakdown. If the two disagree, something has been recorded in one but not the other.
Where it fits in
Payroll often uses control accounts for net pay and for the statutory liabilities, with the per-employee detail behind them. Reconciling the control account to the subledger is a standard check that payroll has been recorded completely and correctly.
Key rules
- A general-ledger account summarising a subledger.
- Its balance equals the total of the subledger's accounts.
- Used for debtors, creditors and payroll liabilities.
- A mismatch signals a recording error in one of the two.
