The workings of the Receivables/Payables Control accounts have now been introduced. The first we saw of them was within the General Ledger in overview diagram.
By offsetting credit (i.e. not immediate cash payment) invoices against actual cash payments/receipts, these Control accounts tell us the total outstanding receivables & payables.
In theory the total should equal the total of the individual accounts receivable (each customer account) or accounts payable (each vendor account).
By reconciling these, we get a further accuracy check.
Control Accounts