What is the check -up account?
The control account is a summary account in the financial book that accumulates details about the account in the subsidiary - the leader Ledgers monitors all financial transactions within the company. Information managed in a subsidiary is details supporting the main book information. Daughter books are used to monitor various items that accumulate on the main book, including receivables, payable accounts, supplies and income. In addition to the amounts of transactions, the books of subsidiaries will often include names, locations, descriptions and data. Each of the daughter book items will usually have a control account on the main book.
The accounting department uses test balances generated from the main book in accumulating monthly, quarterly and annual financial data. In general, the accounting department rarely requires the type of detail monitored in a subsidiary. For example, vable -received accounts will have to have access to customer information such as a telephone number to potentially contact the customer aboutParticularly unpaid balances. In most situations, however, the accounting department would rather see the sums of outstanding receivables and not information about customers associated with specific transactions. At any time, the receivables department updates the amount due in the customer's record, the control account in the main book is updated by a change that provides easily accessible access to the overall receivable.
The control account is updated when subsidiaries systematically transmit information to the main book. The timing of updates to control accounts depends on various factors, including the complexity of the systems, the size of the corporation and even the planning narrowly at the end of the month. The vast corporations, the main book system, will usually be its own independent software system, separately from transactions monitoring daughter books for items such as receivables or supplies. Control accounts in such situations may not be after CEThe current month is up to date, because planning information between the daughter's book and the main book is not in real time. Smaller businesses may not have the same problem, because the main books and daughter books could be included in one software package.
One of the advantages of checking accounts is the potential for increasing segregation of duties, which is useful in limiting errors and fraud. Individuals who were needed to monitor the data in daughter's books are often separated from those who accumulate financial data separately. When creating the financial statements, the reconciliation between control accounts and subsidiaries will be reconciled to ensure the correct balance for a specific line item. In the end, check accounts make it easier to accumulate financial data for the accounting department.