Share
Have an account? Sign In Now
For the sake of quality, our forum is currently "Restricted" to invitation-only. In case if you wish to join our forum, please send an email seeking an invitation to "[email protected]".
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Sales Ledger Control Account is generally debited. It is debited if its balance increases & credited if its balance decreases.
First, let me help you understand the meaning of the term Sales Ledger Control Account.
Meaning of Sales Ledger Control Account
Sales Ledger Control Account (SLCA) is a summarized ledger of all the trade debtors of the entity. This Control Account typically looks like a “T-Account” or a replica of an Individual Trade Receivable (Debtor) account. But instead of containing transactions of invoices, returns, and receipts, etc related to one debtor, it contains summarized transactions of invoices, returns, and receipts, etc related to all the debtors of the business.
Sales Ledger Control Account is also referred to as “Trade Debtors Control Account”.
The balance of SLCA should equal the sum of balances of the individual customer accounts. If discrepancies arise, then it should be investigated.
Is Sales Ledger Control Account a debit or credit?
Sales Ledger Control Account indicates the total amount owed to a business entity by all its customers at a particular point of time. Therefore, it is a “short-term asset” for the business entity and forms part of the balance sheet.
As per Modern approach of accounting – Debit the increase in asset, Credit the decrease in asset.
SLCA is an asset, therefore it is generally debited. It will be debited if its balance increases & credited if balance decreases. Also, it will generally show a debit balance.
Example of Sales Ledger Control Account
Suppose following were during the year transactions with the Debtors Sugar Inc. & Chocolate Inc. along with the outstanding balance as at 31/12/20×2.
Sales Ledger Control Account for the year 01/01/20×2 to 31/12/20×2 will be presented as follows-
The balance of SLCA ie. 535,000 is equal to the sum of the balance of individual outstanding debtors ie. 265,000 + 270,000 = 535,000.
You can see that the transactions which increase the balance of SLCA are debited & decrease the balance are credited. Also, it is depicting a debit balance.