Control totals are an essential part of accounting and banking transactions, as they help confirm key data such as the total number of records and their total value. Let’s take an example of banking, where an employee scans a stack of checks and is first instructed to enter the total number of checks in the stack and their expected total value. When the scanning process completes, the actual number, and value of items scanned should match the control totals entered at the beginning.
Control totals can also help detect discrepancies in the data, such as missing records or incorrect transaction values, which can be quickly rectified. Besides, it ensures the accuracy and completeness of transactions and reduces the chances of fraud or errors.
Why are control totals important in accounting?
Control totals help in verifying the completeness and accuracy of accounting transactions and prevent fraud or errors.
What happens if control totals don’t match in a banking transaction?
If the actual value or number of records scanned does not match the control totals entered at the beginning, it indicates a discrepancy in the data that needs to be identified and rectified.
How often are control totals used in accounting and banking transactions?
Control totals are used regularly in accounting and banking transactions to ensure accuracy and completeness. Their frequency of use depends on the type and size of the transaction and the organization’s internal control process.
Control totals are an essential tool to maintain data accuracy and completeness in accounting and banking transactions. They help detect discrepancies and prevent fraud or errors, making them critical for financial institutions’ operations.