Control accounts act as a single sum related to a large group of individual accounts. Examples include accounts receivable and accounts payable on the balance sheet. It is rare to find a control account on the income statement. Most accounting software use subsidiary ledgers with control accounts.
Another tool used by accountants to evaluate financial performance is project costing. It is also referred to as contract or job costing. This lesson uses the term ‘job’ throughout. Job costing focuses on a specific long-term project customarily associated with a contract signed with a customer.
Every small business should track their sales in order to evaluate performance, opportunity and trends. In a good system sales will identify date and time of purchase; customer’s name and demographic information; items purchased with quantity and dollar values and finally, methods of payment.
One of the best parts of being a bookkeeper is seeing employees smile when they utilize employee benefits. There are a multitude of different employee benefits out there including: 1) Health Insurance, 2) Retirement, 3) Life Insurance, 4) Dental Care, 5) Vision Care, 6) Cancer Insurance, 7) Disability Insurance and 8) Child Care.
Control accounts are used when there are multiple third parties interacting with the business in regards to similar function. Control accounts reduce the workload for bookkeeping by using subsidiary accounts or schedules *. The aggregated value is reported as one line of value on the financial report.
A control account in the Chart of Accounts is used when there is a need to separate multiple third parties with a similar function. Work in process works perfectly as a control account.
Accounting uses accounts to sum up activity related to a particular function of business. As an example the bank account has a register which identifies the activity in a ledger format of what transpires at the bank for this particular account.
