The causes for having keep an eye on accounts are as follows:
1. Check at the accuracy
They supply a take a look at at the accuracy of entries made within the private accounts within the gross sales ledger and buy ledger. It is so easy to make a screw up in posting entries, as a result of there may well be masses of entries to make. Figures would possibly get transposed. Some entries may well be not noted altogether, in order that an bill or a cost transaction does now not seem in a non-public account because it will have to. By evaluating:
o The overall stability at the borrowers account with the entire of particular person balances at the private accounts within the gross sales ledger.
o The overall stability at the collectors account with the entire of particular person balances at the private accounts within the acquire ledger.
It is conceivable to spot the truth that mistakes were made.
2. Location of mistakes
It may additionally lend a hand within the location of mistakes, the place posting to the keep an eye on 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 non-public account, or makes a transaction error, it might be an impressive activity to find the mistake or mistakes on the finish of a yr, say, given the masses or hundreds of transactions throughout the yr.
By the use of the keep an eye on 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.
three. For interior take a look at
Where there’s a separate of clerical bookkeeping tasks, the keep an eye on account supplies an interior take a look at. The particular person posting entries to the accounts will act as take a look at on a unique particular person whose activity it’s to put up entries to the gross sales and buy ledger accounts.
four. More merely and briefly
To supply borrowers and collectors balances extra briefly for generating a tribulation stability or stability sheet. A unmarried stability on a keep an eye on account is clearly anticipated more effective and briefly than many particular person balances within the gross sales or acquire ledger.
This manner additionally that the quantity 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 handiest and the keep an eye on accounts as an alternative give you the accounts required for a double access machine.