Benefits

• • Control accounts can show that an arithmetical error has occurred if the balance on the control account does not equal the total of the individual accounts, then an error has definitely taken place.
  • This helps to avoid incorrect balances in the receivables ledger and in the payables ledger.
• • Immediately provide total figures for trade receivables and trade payables, instead of having to add up the individual accounts in the receivables and payables ledger. Helps to produce the financial statements.
• • Help to prevent fraud. This is because managers have access to control accounts, which restricts the possibility of fraudulent entries by other employees.