An account that records totals of amounts entered in a subsidiary ledger. Control accounts are used to test the accuracy of calculations and postings to ledger accounts.
Control accounts are linked to business partners. When a document is posted to the business partner, the journal entry includes also the control account. Each customer has one default A/R control account, and each vendor has one default A/P control account, however it is possible to replace the control account in any document. A control account holds the total A/R or A/P balance for all linked business partners. Control accounts are included in the balance sheet report, so their balance reflects your total balances for customers and vendors. Manual journal entries cannot be posted to a control account.
There are two types of control accounts:
- Debtors control account
- Creditors control account