accounting Accounting, also known as accountancy, is the measurement, processing, and communication of financial and non financial information about economic entities such as businesses and corporations. Accounting, which has been called the "languag ...

, the controlling account (also known as an adjustment or control accountcontrol account
definition in ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...

'' lexicon) is an account in the general ledger for which a corresponding

subsidiary ledger The subledger, or subsidiary ledger, provides details behind entries in the general ledger used in accounting. The subledger shows detail for part of the accounting records such as property and equipment, prepaid expenses, etc. The detail would ...

has been created. The subsidiary ledger allows for tracking transactions within the controlling account in more detail. Individual transactions are posted both to the controlling account and the corresponding subsidiary ledger, and the totals for both are compared when preparing a

trial balance A trial balance is a list of all the general ledger accounts (both revenue and capital) contained in the ledger of a business. This list will contain the name of each nominal ledger account and the value of that nominal ledger balance. Each nomi ...

to ensure accuracy. For example, "

accounts receivable Accounts receivable, abbreviated as AR or A/R, are legally enforceable claims for payment held by a business for goods supplied or services rendered that customers have ordered but not paid for. These are generally in the form of invoices raised b ...

" is the controlling account for the accounts receivable subsidiary ledger. In this subsidiary ledger, each credit customer has their own account with its own balance. Thus, while the "accounts receivable balance" can report how much the company is owed, the accounts receivable subsidiary ledger can report how much is owed from each credit customer. Other examples of controlling accounts and their subsidiary ledgers include "

accounts payable Accounts payable (AP) is money owed by a business to its suppliers shown as a liability on a company's balance sheet. It is distinct from notes payable liabilities, which are debts created by formal legal instrument documents. An accounts payable ...

" (accounts payable subsidiary ledger) and "

equipment Equipment most commonly refers to a set of tools or other objects commonly used to achieve a particular objective. Different job Work or labor (or labour in British English) is intentional activity people perform to support the needs and ...

" (equipment subsidiary ledger). In common use, control accounts refer to those that would, under ideal circumstances, balance to zero. For example, an inventory control account will hold the balance amount between a stock account updated by stock transactions on the balance sheet and the value of stock on hand multiplied by its unit cost. Ideally these would be the same value but rarely are. Reasons for discrepancies include stock losses and gains yet to be "journaled" and the control account measures the differences and provides financial visibility and control of the value of those. If the discrepancy is significant, then actions such as stock counts can be triggered in order to validate stock and correct the balance sheet and clear the control account. Other examples would be the "goods received not invoiced" account.

References

{{reflist Accounting journals and ledgers