Control Account Definition
The definition of a control account is a general ledger account that summarizes (or controls) a subsidiary ledger group of detail accounts. The total should equal the sum of the group of similar accounts. The benefit of not posting all of the detail entries to these accounts is that it keeps the general ledger from becoming too cluttered to manage.
If the totals do not agree, then a reconciliation of the control accounts must be made. Accounting software posts transactions to the control accounts in either summary or detail modes. The benefit of posting in detail is that it is easier to reconcile the subsidiary ledgers to these accounts.
A common example is the accounts receivable general ledger account. Detailed transactions are posted to the customers ledger balance. Either summary or detail postings are made to the control account (i.e.: accounts receivable). The total of the customer account balances must equal the total aggregate balance of the control account in the general ledger. They are often used for Cash, Accounts Payable, Inventory and Fixed Asset accounts.
Chart of Accounts (COA)