Control Accounts Prevent Fraud in Ledgers

Steps:

• Identify the sales ledger control account as a summary in the general ledger mirroring the total of individual customer accounts in the sales ledger.
• Recall its main purposes: reconciling totals, detecting errors, and deterring fraud through independent verification.
• Evaluate options against these roles: fraud prevention fits by allowing cross-checks between ledgers.
• Confirm B aligns with standard accounting practice for internal controls.

Why B is correct:

• Control accounts create a double-check system between the general and subsidiary ledgers, making unauthorized alterations harder to conceal without detection.

Why the others are wrong:

• A: Irrecoverable debts are identified via aging analysis in the detailed sales ledger, not the control account.
• C: Total owed to trade payables is tracked in the purchases ledger control account, not sales.
• D: Totals of cash and credit sales appear in the sales day book and nominal ledger, not the control account.

Final answer: B