FAC1503-23-S2-8E

THE ACCOUNTING CYCLE IS SUMMARISED AS FOLLOWS (Page 3 of

Learning unit 2):
Using Example 2.7 (page 17 of Learning unit) to show how the accounting cycle works:

Using transaction 9 to show how the accounting cycle works:

1) TRANSACTIONS TAKE PLACE

Transaction 9 – Sold inventory for cash, R2 500.

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2) SOURCE DOCUMENTS ARE COMPLETED

Business bank statement and Invoice from SA Products to customer (M Tlhagadi).

SA Products
25 Trade Centre
Centurion, Gauteng, 0157
Gauteng
('012)444 6455
accounts@SA products.co.za
Vat registration No: 4900177126

TAX
INVOICE
To : M Tlhagadi Date: 09 April 2020
Private Bag X60500 Tax invoice number: 2244
Houghton
2041
Vat registration number: 4800188126

Unit
Description Quantity price Amount
Electrician tool kit 2 1250 2 500.00

2 500.00

VAT @ 15% 0
Total price 2 500.00

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3) SOURCE DOCUMENTS ARE RECORDED IN THE BOOKS OF FIRST ENTRY – (Books of first entry will
be covered in Learning unit 4)

Use the bank statement to record the transactions in the business cash receipts journal of SA
Products. The business cash receipts journal is the book of first entry.

4) GENERAL LEDGER UPDATED – (General Ledger will be covered in Learning unit 5)

All the accounts in the business cash receipts journal will be recorded in the general ledger as
follows:

5) TRIAL BALANCE IS COMPILED (Trial balance will be covered in Learning unit 5)

6) FINANCIAL STATEMENTS ARE COMPILED AT THE END OF THE FINANCIAL PERIOD – Not covered
in this syllabus

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