Sarvesh KoushikSarvesh Koushik asked 2 years ago

What is the meaning of control account debit balances in general and with respect to Insurance Agent?
 
 
Reference:Practice manual:  1st point: Scrutinise and review control account debit balance and their nature should be enquired into.
Pg12.9

2 Answers
RaviRavi Staff answered 2 years ago

recollect self-balancing ledger
when ever we have separate ledger for particular accounts, like we have debtors ledger for all customers then general ledger has a account to compensate absence of debtors from general ledger, we have “debtor  ledger adjustment” account this account ensures general ledger tallies. further this account balance should match with total debtor balance in debtors ledger
no this account which tells us about accuracy of ledgers is control account
so now in general ledger there will be control accounts for all subsidiary ledgers
ideally agent account balance should be NIL
but now if agent ledger adjustment account / control account shows debit balance auditor will understand its nature why it is outstanding and go in detail
if required ask for provision or writeoff

RaviRavi Staff answered 2 years ago

balance should be nil or majority times payable (credit balance) and not receivable

Call Back Request