The causes for possessing command accounts are as follows:
1.Take a look at on the precision
They supply a check on the precision of entries produced within the particular person accounts within the income ledger and order ledger. It is rather easy to make a miscalculation in placing up entries, given that there could presumably be a whole bunch of entries to make. Figures could presumably get transposed. Some entries could presumably be omitted utterly, in order that an invoice or a fee transaction doesn’t appear in a particular person account because it actually ought to. By evaluating:
o The total steadiness on the debtors account with the total of particular balances on the person accounts within the income ledger.
o The total steadiness on the collectors account with the total of particular balances on the person accounts within the order ledger.
It’s doable to establish the truth that glitches have been produced.
two.Place of glitches
It might additionally help within the web site of glitches, precisely the place placing as much as the command accounts are produced on a regular basis or weekly, and even month-to-month. If a clerk fails to document an invoice or a fee in a particular person account, or tends to make a transaction mistake, it could be a formidable job to trace down the error or glitches on the shut of a 12 months, say, provided the a whole bunch or a whole bunch of transactions all by way of the 12 months.
By making use of the command account, a comparability with the precise balances within the income or order ledger will be produced for almost each week or day of the thirty day interval, and the error uncovered a lot further quickly than if accounts didn’t exist.
three.For inner check
Wherever there’s a unbiased of clerical bookkeeping obligations, the command account presents an inner check. The human being placing up entries to the accounts will act as check on a singular human being whose job it’s to place up entries to the income and order ledger accounts.
4.Way more merely and quickly
To offer debtors and collectors balances further quickly for producing a trial steadiness or steadiness sheet. A one steadiness on a command account is of course envisioned extra easy and quickly than a lot of particular balances within the income or order ledger.
This means additionally that the number of accounts within the double entry bookkeeping method will be saved right down to a manageable measurement, contemplating that the person accounts are memorandum accounts solely and the command accounts as an alternative present the accounts wanted for a double entry method.