Sales Ledger Control Account Functions

Steps:

• Recall that a sales ledger control account summarizes trade receivables balances for internal checks.
• Evaluate option A: It aids error detection by reconciling control totals with individual ledger accounts.
• Evaluate option B: It deters fraud through independent verification of transactions.
• Evaluate option C: It does not directly prevent irrecoverable debts, which requires separate credit policies.
• Evaluate option D: It offers an instant overview of total receivables.

Why C is correct:

• Control accounts monitor balances but do not enforce collection; irrecoverable debts are prevented by credit control procedures, not accounting summaries.

Why the others are wrong:

• A: Control accounts enable error tracing via reconciliations.
• B: They provide oversight that discourages fraudulent entries.
• D: The control balance directly shows total trade receivables.

Final answer: C