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I believe the purpose of the sales and purchase ledger control accounts (also called the debtor and creditor control accounts respectively) is to enable an overall balance of the accounts to be extracted without bothering to deal with all the individual balances in the private ledger (sales ledger and purchase ledger, containing individual debtors' and creditors' accounts). One reason for this is that in larger organisations, the nominal ledger and the sales and/or purchase ledger are (or used to be) very lengthy and often dealt with by different people. The balance on each control account is the same as the arithmetic sum of the balances on the corresponding accounts in the private ledger - that is, if you add up the debit and credit balances in the sales ledger, for example, the net total is the same as the balance on the sales ledger control account. The information from the sales day book, for example, would feed into both the control accounts and the private ledger accounts, but the person dealing with the nominal ledger and the control accounts would receive totals and the person dealing with the private ledger would receive the detailed information required to update each personal account.
Edited at 19 May 2011 04:56 PM GMT
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