Review the Statements Below and Choose the One That Correctly Describes a Control Account.

Review the Statements Below and Choose the One That Correctly Describes a Control Account

i) A control account is updated at the end of an accounting period to reflect the net change in all equity accounts.

ii) A control account appears in the general ledger and is supported by a subsidiary ledger.

iii) A controlling account is a separate account that is a detailed record of a general ledger account.

iv) A control account appears in a subsidiary ledger and is supported by a general ledger account.

The correct statement describing a control account is,

ii) A control account appears in the general ledger and is supported by a subsidiary ledger.

A control account is a summary-level account in the general ledger that aggregates totals from subsidiary ledger accounts. Subsidiary ledgers contain detailed individual transactions, while the control account provides an overview. It ensures accuracy by reconciling subsidiary ledger totals with the balance in the control account, a crucial process in maintaining precise financial records.

What is Control Account?

A control account is a central ledger account that consolidates balances from various subsidiary accounts, offering a summarized view of a company's financial transactions. It simplifies financial analysis by providing a quick snapshot of overall balances, enhancing efficiency in financial reporting and decision-making processes.