The explanations for having keep watch over accounts are as follows:
1. Test at the accuracy
They supply a test at the accuracy of entries made within the privateaccounts within the gross sales ledger and buy ledger. It is vitally simple to screw up in posting entries, as a result of there may well be loads of entries to make. Figures may get transposed. Some entries is also left out altogether, in order that an bill or a cost transaction does now not seem in a private account because it will have to. By way of evaluating:
o The overall steadiness at the borrowers account with the full of person balances at the private accounts within the gross sales ledger.
o The overall steadiness at the collectors account with the full of person balances at the private accounts within the acquire ledger.
It’s imaginable to spot the truth that mistakes were made.
2. Location of mistakes
It might additionally help within the location of mistakes, the place posting to the keep watch over accounts are made day-to-day or weekly, and even per thirty days. If a clerk fails to report an bill or a cost in a private account, or makes a transaction error, it will be a powerful process to find the mistake or mistakes on the finish of a 12 months, say, given the hundred or 1000’s of transactions all the way through the 12 months.
By way of the use of the keep watch over account, a comparability with the person balances within the gross sales or acquire ledger can also be made for each and every week or day of the month, and the mistake discovered a lot more briefly than if accounts didn’t exist.
3. For interior test
The place there’s a separate of clerical bookkeeping tasks, the keep watch over account supplies an interior test. The individual posting entries to the accounts will act as a test on a unique one who process it to publish entries to the gross sales and buy ledger accounts.
4. Extra merely and briefly
To offer borrowers and collectors balances extra briefly for generating a tribulation steadiness or steadiness sheet. A unmarried steadiness on a keep watch over account is clearly anticipated more practical and briefly than many person balances within the gross sales or acquire ledger.
This implies additionally that the selection of accounts within the double access bookkeeping machine can also be stored all the way down to a manageable dimension, for the reason that private accounts are memorandum accounts simplest and the keep watch over accounts as a substitute give you the accounts required for a double access machine.