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Accounts Payable Reconciliation Process is a way through which we match the closing balance of Accounts Payable Control Ledger Account with the total of balances of individuals suppliers or Accounts Payable Subsidiary Ledgers / Subledgers . Sometimes, there are mistakes, errors or even frauds activities which may cause a Difference Between Control Ledger or Master Ledger and Subsidiary Ledger Accounts of suppliers or creditors. In such case, carefully check the individuals ledger accounts of suppliers and then compare the balance with the accounts payable control account. Example: Suppose, On 1 st April, 2019, XYZ Company purchased 20 chairs of Rs. 5000 each from Mr. A, a supplier, On 5 th April, 2019, 10 tables of Rs. 10000 each from vendor, Mr. B and 8 th April, 2019, 5 bed rooms of Rs. 50000 each from Mr. C. On 25 th April, we paid Rs. 5000 each to Mr. A for 10 chairs. On 27 th April, we paid Cash of Rs. 80000 to Mr. B and on

The process of matching the total of closing balances of Accounts Receivable Subsidiary Ledgers with the closing balance of Accounts Receivable Control Account is called accounts receivable reconciliation. When there is a difference between accounts receivable control account’s closing balance and  total of accounts receivable su bsidiary ledgers’closing balances for the accounting period, then such difference between these two Types of Ledgers is to be reconciled. Such differences occurred due to errors, mistakes or frauds, etc. In that case, there is need to check individuals ledgers accounts and control ledger account to remove the differences. Example Mr. A, Mr. B And Mr. C are the customers of Company XYZ. Following are the transactions taken place with these customers shown below: 2019 June 1. Sold Goods worth Rs. 30000 On Credit To Mr. A 2. Sold Goods worth Rs. 20000 To Mr. B On Account 3. Sold Goods worth Rs.

A Control Ledger Account represent the total of balances of relevant Subsidiary Ledger Accounts such as Purchases Control Ledger Account , Sales Control Ledger Account , Accounts Receivable Control Ledger Account , Accounts Payable Control Ledger Account , etc. The closing balance of a control ledger account is always equal to the total of subledger accounts balances and in this way, we reconcile ledger control account with the subsidiary ledger accounts for the accounting cycle. For example, sales made to various customers i.e., Mr. A, Mr. b, Mr. C, etc are firstly transferred to respective recorded separately in sales subsidiary ledger accounts related to customers Mr. A, Mr. b, etc. and then total of balances of sales subsidiary ledger accounts are finally transferred to Sales Control Ledger Account. The Closing balance of Sales Control Ledger Account is always equal to total of balances of all of the sales subledgers accounts.

Accounts Payable Control Ledger Account is a master ledger account that records the total of balances of all of the Accounts Payable Subsidiary Ledger Accounts for the accounting cycle. For example, XYZ, A B C, etc., are the suppliers of the company. Then all the information related to individual accounts payable such as  Credit Purchases , Purchases Returns , cash paid to supplies, etc.,   are recorded in the relevant Subledgers . At the end of the accounting period, the total of balances are transferred to Accounts Payable Control Ledger Account at one place. Obviously, the total of the balances from these subledgers are always equal to the balance shown in one single account i.e., accounts payable control account of a company.

An Accounts Receivable Control Ledger Account or Accounts Receivable Master Ledger Account is used to show the final value of all of the Accounts Receivable Subsidiary Ledger Accounts for the accounting period. For example, Mr. A, Mr. B , Mr. C, etc., are the customers of the Company XYZ to whom the company sold goods or services on credit or on account. At the end of the accounting cycle, all the balances of individuals accounts receivables ledger accounts (customers subledgers ledger accounts) are added and transferred to Accounts Receivable Control Ledger Account . The closing balance of that control account must be equal to the total of balances of all of the accounts receivable subledgers accounts. Accounts Receivable Control Ledger Account is also known as Accounts Receivable General Ledger.

A Sales Control Ledger or Master Ledger is the General Ledger in which all the balances of Subsidiary Sales Ledgers are totaled and then finalized value of Credit Sales is shown in the Income Statement for the accounting period. Sales Control Ledger Account balance must be equal to the total of balances of all the Sales Subsidiary or Subledgers Accounts, otherwise it should be reconciled with the total of balances of subsidiary ledger accounts’ balances.

A Sales Subsidiary Ledger or Sales Subledger shows credit sales from each customer ledger accounts during the accounting cycle. In other words, it shows how much Credit Sales is made by the company with each customers during the accounting period. It shows detailed information of each sales subsidiary ledgers’ balances separately in order to avoid difficulty in preparing Sales Control Ledger or Sales Master Ledger Account . For Example, Mr. A, B , C, etc., are customers of the company to whom the company sold goods or services on account. Then the company’s accountant prepares Sales Subsidiary Ledger Account for customers, Mr. A, Mr. B and so on. All the closing balances of each sales accounts are finally totaled in Sales Control Ledger Account to represent the value of credit sales to be shown in the Income Statement for the accounting period.

A Purchases Control Ledger is used to show the sum or total of Purchases Subsidiary Ledgers or list  of   suppliers or vendors from whom the company made Credit Purchases . So, it is a master account of all of the Purchases subledgers accounts’ balances. The closing balance of purchases control ledger must be matched with the total of balances of purchases subsdiary ledgers accounts otherwise, there are some mistakes, errors or frauds which must be resolved by matching these two Types of Ledgers  that is a reconciliation process.

A Purchases Subsidiary or Subledger shows a  number  of credit purchases accou nts balances that are created when the company purchases goods or services from different suppliers or vendors  during the accounting period. The total of balances of these purchases subsidiary ledgers are finally transferred to Purchases Ledger or Purchases Control Ledger Account . The purchases subsidiary ledgers and purchases control ledger record only Credit Purchases while Cash Purchases is recorded only in the Cash Book .

The normal, positive, favorable or usual b ala nce of Accrued Expe nses is credit balance and unfavorable, unusual, negative or unusual balance is debit balance. When these are incurred or increased, we credit these and when these are closed or decreased, we debit these according to the Rules of Debit And Credit . Usually, accrued expenses (which are Current Liabilities ) are credited as mentioned above, however, when these are decreased or closed, then we debit accrued expenses instead of credit such as in case of Reversal Entry , the accrued expenses are debited. When the expenses accrued or outstanding or payable for the month for which the services already received, have been paid off, then we record the following entry:                                          Accrued Expenses a/c   XXX                                                                               Expenses a/c   XXX