Financial Literacy

Cash Receipts Journal and Cash

Payments Journal (Sole Trader)
Weeks 2, 3, 4

EMS
Grade 9

Term 1
 Cash
Payments
and Receipts
Journal
 Effect of Cash
Transactions on the
Accounting Equation
• Ask the question if money was
received (CRJ) or paid out (CPJ)
• If entries are made in the CPJ, then
assets decrease. he "bank" column
is added up to show the total
payments. The totals of the other
three columns show how much was
paid to what
• If entries are made in the CRJ, then
assets increase. Major categories of
receipts, such as from income or
from debtors, receive their own
column
• The category called sundry is used
to represent various miscellaneous
(and less regular) items, such as
capital or receiving cash from a loan
 Effect of Cash
Transactions on the
Accounting Equation

• Recording accounting transactions with

the accounting equation means that you
use debits and credits to record every
transaction – this is known as double-
entry bookkeeping
• From the accounting equation, the
amount of assets must equal the
combined amount of liabilities plus
owner's equity
• The balance is maintained because
every business transaction affects at
least two of a company's accounts
• The accounting equation is: Assets =
Liabilities + Shareholders' Equity
 Example of How
Accounting
Transactions are
Recorded Within
the Framework of
the Accounting
Equation