2024 Accounting Grade 10 Learners Notes Session 1-5

SECONDARY SCHOOL IMPROVEMENT PROGRAMME
(SSIP) 2024
GRADE 10
SUBJECT: ACCOUNTING
LEARNER NOTES
SESSION 1- 5
(Page 1 of 101 pages)

2
TABLE OF CONTENTS
SESSION TOPIC PAGE
1 Ethics, Internal Control and GAAP principles 3-10
2 Additional cash transactions and the Petty Cash

11-35
Journal (PCJ)
3 Credit sales 35-58
4 59-81
Credit purchases
5 General Journal 82-101
© Gauteng Department of Education

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SESSION 1: ETHICS, INTERNAL CONTROL AND GAAP
ETHICS
The word ethics is defined as a set of moral
principles of a profession according to which a
person should behave. It is a set of rules of
conduct that provide the distinction between
right and wrong behaviour.
People in business are not always trustworthy.
The managers and employees of the business
know the right way of doing business, but they
can be dishonest or be silent about information
that can have a negative influence on their
business.
Businesses know the right conduct and
behaviour but sometimes they bend the rules to
make the deal. This is the reason why
businesses have conduct rules that explain
how their staff is expected to behave – a Code
of Ethics.
CODE OF ETHICS
 Every organisation has a code of ethics and sets its own policies and procedures. The code of ethics
explains the responsibility of the employee towards the public, clients, colleagues, and employers.
 The purpose of a code of ethics is to promote an ethical culture in the financial profession, and guides
employees in performing professional services, as well as promoting the confidence of outsiders in our
business.
HOW DOES CODE OF ETHICS BENEFIT THE BUSINESSES?

 It explains the values, ethics and beliefs of the organisation and indicate the basis for all policies and
decisions.
 It informs every person in the organisation about the expected standard of behaviour.
 Outsiders can confidently engage in business transactions with the organisation/business.
 It prevents the development of undesirable trends that may affect the business in future.
UNETHICAL BEHAVIOUR
The examples are as follows:
• dishonesty
• fraud
• declaring bankruptcy to cancel a labour contract and cut wages
FRAUD
Fraud is dishonest dealings, cheating and any misrepresentation of the truth to take money from a person.
Fraud occurs when all the following elements or signs are identified:
• a person or organization intentionally makes an untrue representation of an important fact
• this is believed by the victim
• the victim acts upon the untrue representation
• the victim suffers loss of money or property as a result

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BASIC PRINCIPLES OF ETHICS
The term “Good corporate governance” deals with the way a business is run. The management of the
business can manage the business in an ethical or unethical manner.
Provided below are the characteristic of good corporate governance:
Leadership People who have the responsibility for providing leadership
should ensure that their own actions and the action of
people they lead are in compliance with the code of ethics.
Discipline All members of an organisation need to behave with restraint

and ensure that their actions are always governed by the
code of ethics. If they do not do this, management should
introduce corrective measures as soon as possible.
Transparency If your actions are always ethical then there should be no

problem if others are informed of your decisions and the
reasons for them. This prevents misunderstanding and
promotes trust between members of the organisation.
Accountability This means that in all situations the members of the

organisation should be prepared to take responsibility for
their actions - whether they are good or bad. This gives
people confidence in the honesty and truthfulness of the
people within the organisation.
Fairness All people and situations should be handled objectively and
without bias. This again will promote trust towards the
organisation.
Sustainability The resources used by the businesses in the daily running of

the business should be replaceable. This can happen
naturally or as a result intervention by the organisation itself.
In this way the business should be able to operate
indefinitely.
Responsible management The people responsible for running the business should at
all times behave in a conscientious and trustworthy manner.
In this way they will ensure ethical behaviour on the part of
employees and the organisation.

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ACTIVITY 1
REQUIRED
Match the concept with the correct explanation.
CONCEPT EXPLANATION
1 Leadership A Management should always be
trustworthy
2 Discipline B All people and situations should be
handled the same.
3 Transparency C All members of an organisation should
behave with restraint.
4 Accountability D All stakeholders should be kept
informed of all decisions.
5 Fairness E Management needs to set a good
example.
6 Sustainability F All people should take responsibility
for their actions.
7 Responsible management G Management should ensure that any
resources that are used, can be
replaced.
WORK SHEET 1
CONCEPT EXPLANATION
1 Leadership
2 Discipline
3 Transparency
4 Accountability
5 Fairness
6 Sustainability
7 Responsible management

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INTERNAL CONTROL
WHY SHOULD A BUSINESS HAVE INTERNAL CONTROLS?
 In a business loss may occur due to theft, damage and errors. As a result, a business needs to have
various procedures in place so that checks and balances take place on a daily basis.
 If these procedures are done every day many of the possible losses will be identified in time and steps
can then be taken to prevent them from happening.
WHAT IS INTERNAL CONTROL?

Internal control is the systems or procedures that are put in place to monitor various activities in the
business so that any losses are reduced or avoided altogether.
The aim of any business is to safeguard the possessions in the form of cash, stock, vehicles or equipment in
order to operate at maximum efficiency
WHAT IS THE PURPOSE OF INTERNAL CONTROL?
Purpose of Controls Examples

• Identify areas where the accepted procedure is • It is when the cashier who is operating the cash
not being carried out. register is expected to lock the cash.
• Detect the waste of the business resources • The control systems should be able to identify
the waste of material in the manufacturing
environment, the production targets should also
be set to avoid high labour cost.
• Safeguard assets. • These are measures put in place to prevent
assets from being stolen, lost or damaged e.g.
locking our vehicles away in a garage
overnight.
• Detect errors. • Internal control procedures can identify if we
are being overcharged by the bank or creditor.
• Detect and expose fraud. • This is theft committed by somebody within the
business environment. Internal control can for
instance detect if an employee wrote out a
company cheque for his personal use.
ACCOUNTING CONTROLS
The following are some of the Accounting controls that can be put in place:
• Duties are assigned to employees in such a way that everybody knows who is responsible and
accountable for various activities, e.g., the cashier is responsible for the cash received from her cash
register.
• All transactions should be properly recorded. The duties should be divided, the person who received
money should not be responsible for recording the transactions, and this way gives one less
opportunity to steal from the business.
• Cash received should be deposited daily so that large amounts of cash are not kept on the premises.
• Changes in procedure must be authorised by senior management.
• Documents must be pre-numbered so that any every document can be accounted for.

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SECURITY MEASURES
The following security measures could be put in place:
 Storerooms should be locked and keys should be available only to authorised employees.
 Large amounts of cash must be transported by a security company.
 Cash registers should be kept in a safe area away from the exit point in the business.
 Computers should be kept in rooms where only authorised people have access. All authorised
people should have their own password for the computer system.
 The business should have a register for all assets. Regular checks on the assets and ensure
that all assets on the register can be accounted for.
 Security measures such as cameras or security guards should be in place in order to prevent
shoplifting.
 Gate control for all vehicles entering and leaving the premises.

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GAAP
Generally Accepted Accounting Principles (GAAP) refers to common set of Accounting principles, standards
and procedures that companies/businesses and their Accountants should follow when they prepare the
financial statements.
Why are GAAP principles or concepts important for financial reporting?
They are:
• Understandable
• Relevant
• Reliable
• Useful
• Timely
• Verifiable
• Neutral and consistent
• Comparable
GAAP PRINCIPLES
Historical Cost Principle

It is based on the rule that assets will be valued at historical cost, i.e. assets will be recorded at the amount
that was paid for them at the point of acquisition. Example Land and buildings appreciates in value if they
are properly maintained, but they will be recorded at the original cost price.
Matching
Expenses and income should be recorded in the correct financial period in which they occur. This will
include the expenses or income that has not been received .This means income and expenses are
recorded when they are incurred not when they are received or paid.
Prudence
A business must not overestimate its income, assets and profits and it must not underestimate its liabilities,
the losses and expenses. This concept is based on the assumption that financial results are presented in a
conservative manner.
Materiality
• All items that are material enough to affect evaluation or decision should be disclosed separately in the
financial statements.
• All values that appear in the financial statements must have material value, companies can group
smaller items together.
Business Entity
The financial affairs of a business are kept separately from the financial affairs of the owner, his personal
income or expenses should not be recorded in the books of the business.
Going concern
Financial statements are prepared on the assumption that the business will continue to operate within the
foreseeable future. This means the business has resources needed to continue operating as a business
until it provides evidence to the contrary (opposite or bankruptcy).

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ACTIVITY 2
Examples of year-end adjustments Principle Applied

Damages payable to a client will be finalised next year, an Historical Cost
estimated amount of R20 000 is recorded this year.
The owner of the business won R25 000 in a competition and Business Entity
this amount is not reflected in the financial statements of the
business.
Land and buildings are shown in the Balance sheet at R450 000, Going-concern
the estate agency said they could be sold for R950 000.
Interest on overdraft is shown as a separate amount in the Matching

Income Statement.
Trading stock is shown in the Balance sheet at R90 0000, even Materiality
though a business will get R75 000 if the stock was sold at the
flea market the following day.
When a debtor settles an account, the discount allowed must be Prudence

recorded at the same time.
WORKSHEET 2
Examples of year-end adjustments Principle Applied

Damages payable to a client will be finalised next year, an
estimated amount of R20 000 is recorded this year.
The owner of the business won R25 000 in a competition and

this amount is not reflected in the financial statements of the
business.
Land and buildings are shown in the Balance sheet at R450 000,
the estate agency said they could be sold for R950 000.
Interest on overdraft is shown as a separate amount in the

Income Statement.
Trading stock is shown in the Balance sheet at R90 0000, even

though a business will get R75 000 if the stock was sold at the
flea market the following day.
When a debtor settles an account, the discount allowed must be

recorded at the same time.

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ACTIVITY 3
INTERNAL CONTROL AND APPLICATION OF GAAP PRINCIPLES
Sandy Peterson opened a car-wash business, called “Soapy Car Wash”, in Northcliff, North of
Johannesburg.
Sandy works as a full-time teacher and has therefore employed two people in her business. She only goes
to the car wash every evening when the business is closing for the day to collect the day’s cash.
Sandy provides all the services to customers for cash only.
She leaves money to purchase detergents, car wash shampoo etc. in a petty cash box. She has not placed
any of the two employees to take charge of the petty cash but asked them to always write out a note when
they take money from the box.
Sandy also leaves a certain amount of cash at the car wash as cash float in the form of coins and notes, this
is for the customers change when they pay. The cash float is not fixed and not recorded as well.
Sandy has given her employees a notebook to record the number of cars washed and the money collected.
She has no receipt book and the customers do not get any receipts when payments are made. Sandy
suspects that not all the cash received is recorded.
Sandy allows her family members to wash their cars for free, the costs incurred for washing family members’
cars are not recorded.
Sandy recently sold three old high pressure water hosepipes that belong to the business for R1 000 each.
The amount of R3 000 received was deposited into her personal current bank account not the business
account.
REQUIRED
Answer the questions provided below
3.1 Identify THREE weaknesses in the internal control system of Soapy Car Wash. (6)
3.2 List THREE internal control processes that must be put in place to reduce levels of theft to (6)
a minimum.
3.3 Did Sandy follow the correct procedure when she deposited R3 000 obtained from the (4)
sales of horse pipes into her personal banking account? Support your argument by
referring to the appropriate GAAP principle.
3.4 Sandy allows family members to wash their cars for free and no records are kept, as an .
accountant what advice would you give to her. Provide TWO points. (4)
TOTAL MARKS
20

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SESSION 2: ADDITIONAL CASH TRANSACTIONS AND PETTY CASH JOURNAL
BASIC ACCOUNTING CONCEPTS
CONCEPTS DEFINITION
Capital contribution The amount of money deposited by the owner in the bank account of the
business to start or extend business activities.
Drawings Money and goods taken by owner from the business for personal use.
Owner’s equity The owner’s share in the business – the owner’s worth.
Owner’s equity represents:
o capital
o drawings
o profit or loss (difference between income and expenses)
Receipts All money received by the business and deposited in the business’s bank
account.
Example: rent income, capital contribution, cash sales etc.
Payments Money spent for business expenses, liabilities, and for buying assets such
as equipment.
Income It is the value received or receivable (still to be received) for the financial
year.
Expenditure It is the value paid or payable (still to be paid) for the financial year.
Profit Money you are left with after paying for all the business expenses. It means
that income of the business is more than its expenses.
Loss When the expenses of the business are more than income.
Assets Items that have value and belong to the business or individuals. They enable
the business to earn income.
Current Assets Assets that are likely to be converted into cash within 12 months.
Non-Current Assets Assets that are expected to be kept for a period longer than a year e.g.
Fixed assets and investments.
Liabilities Liabilities are debts or obligations a person or business owes to someone
else.
Current Liabilities Debts that are expected to be paid off within 12 months.
Non-Current Liabilities Debts that are payable over a longer period, example in 12 months.

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Non-Current Assets Current Assets

Land and Premises bought to Bank Cash deposited in the current
buildings generate income for the account of the business.
business.
Vehicles Vehicles bought for use Cash float Money kept in the cash register
by the business, such as to give change to customers.
trucks, delivery vans etc.
Equipment All items needed to run Petty cash Cash kept aside to pay out
the business – cash small amounts, like stamps,
register, furniture, pens, milk etc.
computers etc.
Fixed deposit / Surplus funds invested Trading Goods bought by the business;
investment in a bank for a specific stock they are sold at higher price.
term at a specific
interest rate. The funds
are available at the end
of the term of investment
Debtors People who buy goods on

credit and pay later – they owe
the business money.
Non-Current Liabilities Current Liabilities

Mortgage A bank loan for purchasing Bank overdraft The business withdraws
loan land and buildings – over a more money from the
period of 20 – 30 years. bank account than what it
had in the account – the
business now owes the
bank money
Loans Money that the business Creditors The people from whom
(long-term) loans from a bank for more the owner buys goods on
than 12 months. The credit – the business
business pays interest on the receives the goods now
outstanding balance of the and pays later.
loan. The business owes the
creditors money.
Short-term It is the portion of the long-
loans term loan that will be
repaid within the next 12
months.

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Assets Liabilities
What the business What the business
OWNS OWES
Debit Credit
balance balance
Expenses Income
Money paid out for the Money which the
day-to-day running of business receives in the
the business day-to-day running of
the business

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ASSETS OWNERS’ EQUITY LIABILITIES
NON- CURRENT ASSETS A. Capital Credit balance NON- CURRENT LIABILITIES

Mortgage loan
Fixed/Tangible assets B. Drawings Debit balance Loan from bank
Land & Buildings C. Profit Credit balance
Vehicles
Equipment Expenses Income
Interest paid Sales CURRENT LIABILITIES
Salaries Rent received Creditors
Packing material Interest received Bank (overdraft)
Cost of sales Current income
Financial assets Rent paid Discount received
Fixed deposit Stationery Commission
Advertising
Wages
Discount allowed
CURRENT ASSETS Telephone
Trading Stock Repairs
Debtors Water and electricity
Bank (debit balance) Rates and taxes
Cash float Consumables
Petty cash
Debit-when they increase Debit expense accounts Credit income accounts Credit-when they increase
Credit-when they decrease Debit-when they decrease

Basic Accounting Equation: Assets = Owners’ Equity + Liabilities
Owner’s equity = Assets – Liabilities
Note: Income increases owner’s equity and expenses decrease owner’s equity.

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SUMMARY OF ADDITIONAL CASH TRANSACTIONS

Note: The business uses a mark-up of 50% on cost price. Assume that the business has a favourable bank balance.
Concept and explanation Transaction Journal General Ledger Effect on Accounting Equation
Account Dr Account CR A OE L
Credit card/debit card transactions: Credit card sales CRJ Bank Sales +15 000 +15 000 0
Credit/debit card transactions is a cash amounted to R15 000 Cost of sales Trading stock -10 000 -10 000 0
transaction, money is immediately
transferred to the business’ bank
account; it is treated the same as cash
sales transactions.
Stop orders / Debit orders: The bank statement CPJ Insurance Bank -3 000 -3 000 0
Are used to pay regular expenses. The reflected a debit order for
bank will subtract money from the the monthly insurance
business bank account. The premium, R3 000.
transaction will be reflected on Bank
statement.
Discount allowed: Receive R3 800 from M CRJ Bank Debtors + 3 800 0 0
The business will allow a discount to its Molala (debtor) in control - 3 800
debtors for early payment. settlement of his account Discount Debtors -200 -200 0
of R4 000. Allowed control
Discount received: Paid by EFT to Tom CPJ Creditors Bank -7 600 0 -7 600
The business will receive discounts Supplies in settlement of control
from its suppliers (creditors) for early our account of R8 000 Creditors Discount 0 +400 -400
payment. less 5% discount. control received
Fixed Deposit: Invest R80 000 at RSA CPJ Fixed Deposit: Bank +80 000 0 0
Extra money in a business can be Bank for a fixed deposit RSA Bank -80 000
invested in a financial institution for a for 12 months at 8%
fixed period. The business will earn interest per annum.
interest on the fixed deposit Interest receivable every
six months. Paid the
amount via EFT.

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Concept and explanation Transaction Journal General Ledger Effect on Accounting Equation
Fixed Deposit continued Received the interest on CRJ Bank Interest on +3 200 +3 200 0
fixed deposit after six fixed deposit
months
The fixed deposit CRJ Bank Fixed Deposit: +80 000 0 0
80 000 x 8% x 6/12 =3 200 matured after 12 months. RSA Bank -80 000
Received the amount Bank Interest on +3 200 +3 200 0
invested plus remaining fixed deposit
interest
Loan: Received R500 000 from CRJ Bank Loan: Perm +500 000 0 +500 000
The business can borrow money from Perm Bank for a loan. Bank
a financial institution. Interest will be Interest payable per
charged on the loan month at 15% per annum
Pay interest on loan for a CPJ Interest on Bank -6 250 -6 250 0
month loan
Interest on current account: According to the bank CRJ Bank Interest on +150 +150 0
If the business has a favourable bank statement, R150 interest current
balance, the business will earn interest was earned on a credit account
bank balance
Check the note below:
Bank charges and interest on The bank statement CPJ Interest on Bank -320 -320 0
overdraft: received revealed the overdraft
The business needs to pay the bank following: Bank charges Bank -560 -560 0
for services rendered by the bank, they • Interest on
are called bank charges. If the overdraft, R320
business has an overdraft bank • Bank charges, R560
balance, the bank will charge the
business interest.  Favourable Bank balance of the business- will have a debit balance.
NOTE: Bank charges and interest on  Favourable Bank balance of the business- will be reflected on the credit side of the bank statement.
overdraft are two different accounts.

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General Ledger Effect on Accounting Equation

Concept and explanation Transaction Journal
Carriage on purchases and carriage Paid via EFT to Susan CPJ Trading Stock Bank +450 0 0
on sales: Transporters for: -450
The cost of getting trading stock • Carriage on Carriage on Bank -620 -620 0
delivered is called carriage on purchases, R450 Sales
purchases. Carriage on purchases • Carriage on sales,
forms part of the cost price of the R620
trading stock and will be debited to the
trading stock account.
Carriage on sales is delivery costs

charged for goods delivered to
customers, it will be a separate
expense account.

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ILLUSTRATIVE ACTIVITY
1.1 CASH JOURNALS

JADE CREATIONS
The following information was taken from the books of Jade Creations for March 2023.
Jade Creations uses a mark-up of 60% for all merchandise sold.
REQUIRED:
1.1.1 Complete the following Journals in the financial records of Jade Creations for
March 2023:
•Cash Receipts Journal
•Cash Payments Journal
1.1.2 Post to the Bank Account in the General Ledger. Balance the account at the end
of March 2023.
Note: The opening balance is recorded in the answer book.
TRANSACTIONS FOR MARCH 2023

Paid Thato Suppliers for trading stock, R12 800 and stationery, R350 (EFT 190).
2
4 Cash sales for the week amounted to R6 520 (CRR 01).
Received an EFT 05 from R Rose for the rent for March 2021, R5 300.
7 Invested R20 000 in a fixed deposit at UK Bank at an interest of 9% per annum, (EFT 191).
12 Transferred weekly wages to the account of Sheila, R2 500, and EFT 192.
14 The profit on goods sold for cash amounted to R2 550, the details of goods sold and amount of
sales is obtainable from CRR 02.
15 A debtor, T Thomas, paid R600 via an EFT in settlement of his account of R650.
16 Received an EFT from XO Bank for R120 000, a loaned amount that was applied for in November
2022.
17 Bought a computer from Ben Traders for R6 420, electronic payment was made, EFT 193.
18 EFT 194 to Telkom in payment of February 2023 telephone account, R850.
20 Transferred weekly wages to the account of Sheila, EFT 195.The amount included a 10%
increase on her normal wages effective from 13 March 2023.
20 Transferred R800 to creditor M Lerato via an EFT 196, a discount of R60 was received on this
transaction.
21 Purchased office stationery from Thato suppliers for R450 and paid using a debit card.

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22 Bought trading stock from KIT Suppliers at the cost of R9 800, 6% trade discount was allowed
and funds were transferred electronically, EFT 197.
23 EFT 198 to Eskom in payment of the following:
•Electricity (business), R1 680
•Electricity (owner), R840
23 Bank statement received from KZN Bank reflected the following:
• Service fees, R175
• Cash handling fees, R95
• Interest on the favourable bank balance, R260
25 Received the first payment on interest on Fixed deposit via EFT from Khanyisa Bank, the amount
of R80 000 was invested six months ago at the rate of 9.5% per annum.
26 Purchased new delivery vehicle from new motors for R240 000; paid 25% of cost price, EFT
199, the remaining balance will be paid in 24 equal monthly instalments.
28 Made a monthly payment on the instalment of the loan, R7 500, the payment included R500
interest on loan, EFT 200.

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EXPECTED SOLUTION
CASH RECEIPTS JOURNAL OF JADE CREATIONS FOR MARCH 2023
F Analysis
Doc Day Details of Bank Sales Cost of Debtors Discount Sundry accounts
receipts sales control allowed Amount F Details
CRR 01 4 Sales 6 520 6 520 6 520 4 075
EFT 05 R Rose 11 820 5 300 Rent income
CRR 02 14 Sales 6 800 6 800 6 800 4 250

BS or
Rec 15 T Thomas 600 600 650 50
BS 16 XO Bank 120 000 120 000 120 000 Loan: XO Bank
BS 23 KZN Bank 260 260 260 Interest on current account
BS 25 UK Bank 3 800 3 800 3 800 Interest on fixed deposit
- 143 280 13 320 8 325 650 50 129 360
43

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CASH PAYMENT JOURNAL OF JADE CREATIONS FOR MARCH 2023

Trading Creditors Discount Sundry accounts
Bank Wages
Doc Day Payee F Stock control received Amount F Details
EFT 190 2 Thato Suppliers 13 150 12 800 350 Stationery
EFT 191 7 UK Bank 20 000 20 000 Fixed Deposit: UK Bank
EFT 192 12 Sheila 2 500 2 5 00
EFT 193 17 Ben Traders 6 420 6 420 Equipment
EFT 194 18 Telkom 850 850 Telephone
EFT 195 20 Shiela 2 750 2750
EFT 196 20 M Lerato 800 860 60

BS 21 Thato Suppliers 450 450 Stationery
EFT 197 22 KIT Suppliers 9 212 9 212
EFT 198 23 Eskom 2 520 1680 Water and Electricity
840 Drawings
BS KZN Bank 270 270 Bank charges
EFT 199 26 New Motors 60 000 60 000 Vehicle
EFT 200 28 XO Bank 7 500 7 000 Loan: XO Bank
500 Interest on loan
126 422 22 012 5 250 8 60 60 98 360

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GENERAL LEDGER OF JADE CREATIONS FOR MARCH 2023
Dr Bank Account B1 Cr
2023 2023
Mar CPJ 126 422
1 Balance b/d 59 000 Mar 31 *Total Payments
31 *Total Receipts CRJ 143 280 Balance c/d 75 858

202 280 202 280
2023
April 1 Balance b/d 75 858
*Accept Sundry Accounts 6

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ACTIVITY 1
Samantha buys and sells furniture only for cash. She uses a mark-up of 75% on cost price. The
following information was taken from the books of Samantha Stores for February 2024.
REQUIRED:
Complete the following Journals in the financial records of Samantha Stores February 2024:
• Cash Receipts Journal
• Cash Payments Journal
Note: Do not total the journals
TRANSACTIONS FOR FEBRUARY 2024

2 The business rents a premise from Gauteng properties at R14 000 per month.
According to the lease agreement, rent has to be increased annually on 1 February
by 10% on the R14 000, paid through EFT 221 the amount owed to Gauteng Properties.
4 Cash sales for the week amounted to R8 750 (CRR 81).
Received R2 800 via EFT from a debtor, R. Brown as partial payment on his account.
7 Re
Bought goods for R15 800 from Solly Traders and paid through EFT 222.
Paid Mokoena Transporters R580 to deliver the goods to the business, EFT223
14 Transferred weekly wages to the account of John, R2 600, and EFT 224.
16 The profit on goods sold for cash amounted to R7 500, the details of goods sold, and
amount of sales is obtainable from CRR 82.
17 Paid Botha Traders (creditor) R14 700 in settlement of our account of R15 000, EFT 225.
19 Received an EFT from RSA Bank for R150 000, a loaned amount that was applied for in
January 2024.
20 Purchased stationery for R560 and goods for R12 400 from Dirk Wholesalers, electronic
payment was made, EFT 226.
21 EFT 227 to Telkom in payment of January 2024 telephone account, R1 400.
22 Credit card sales amounted to R13 125 (CRR 83).

Received an amount through EFT from D. Abrahams (debtor) in settlement of his account of
R6 500 minus 5% discount.
24 Paid through EFT 228 to SN Garage to put petrol in the owner’s private car, R980.
25 Bank statement received from Gauteng Bank reflected the following:
• Service fees, R210
• Interest on the favourable bank balance, R180
28 The fixed deposit at Modern Bank expired today. Received R66 000 through a direct
deposit. Included in the amount is 10% interest per annum. .

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ANSWER SHEET
CASH RECEIPTS JOURNAL OF SAMANTHA STORES FOR FEBRUARY 2024

F Analysis

25
CASH PAYMENT JOURNAL OF SAMANTHA STORES FOR FEBRUARY 2024

Bank Wages
Doc Day Payee F Stock control received Amount F Details

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ACTIVITY 2: CASH JOURNALS

GAUTENG TRADERS
Mary Motloung is the owner of Gauteng Traders. The business buys and sells kitchen
appliances for cash and credit and uses a mark-up of 80% on cost price. The bookkeeper,
Rea Chetty was hospitalized on 14 February 2023 and could not complete the cash
journals. The owner requested you to do the following February 2023.
2.1. Complete the following Journals in the financial records of Gauteng Traders
February 2023:
• Cash Payments Journal
NOTE: The totals are entered into the cash journals for transactions up to 14
February 2023. Add only the Bank column in the journals 28 February 2023.
2.2 Post the cash journals to the following General Ledger accounts and balance the
accounts on 28 February 2023:
• Bank
• Fixed Deposit: MN Bank
Some balances in the General Ledger on 01 February 2023:

Bank overdraft, R12 340
Fixed Deposit: MN Bank, R120 000
Loan: RSA Bank, R380 000
Transactions: 15 February 2023 – 28 February 2023

15. Cash sales according to cash register roll, R14 400 (CRR 230)
Received R 4 560 via EFT from N. Radebe (a debtor) in settlement of his account
after 5% discount.
16. Bought goods to the value of R18 200 from Sophia Wholesalers and paid via EFT 480.
Paid PN Transporters R680 through EFT 481 to deliver the goods to the business.
18. Paid RSA Bank R39 000 through EFT 482 for repayment of the loan and interest of
10% per annum for six months. Interest on loan is included in the R39 000.
20. Credit card sales according cash register roll, R37 800 (CRR 231).
Paid the annual insurance to Safety Insurance through EFT 483, the monthly instalment
is R2 400.
24. Withdraw R4 500 cash from the ATM for:
• R2 000 for the owner for personal use
• R2 500 for wages.
26. Paid Morningstar Traders (creditor) R10 200 in partial settlement of our account through
EFT 484 and receive R300 discount.
27. Purchased goods from Sammy Stores for R23 400 and stationery for R1 200 and paid
through EFT 485.
28. The bank statement from Naledi Bank has been received and reflected the following:
• Interest on bank overdraft, R52
• A direct transfer from MN Bank for part of the fixed deposit matured on
28 February 2023, R60 000 and interest on fixed deposit, R4 000.

27
ANSWER SHEET
CASH RECEIPTS JOURNAL OF GAUTENG TRADERS FOR FEBRUARY 2023

F Analysis
14 Total b/d 84 400 72 000 40 000 12 200 480 ?

28
CASH PAYMENT JOURNAL OF GAUTENG TRADERS FOR FEBRUARY 2023

Bank Wages
Doc Day Details F Stock control received Amount F Details
14 Total b/d 54 200 26 200 2 400 12 400 400 ?

29
2.2: GENERAL LEDGER
GENERAL LEDGER OF GAUTENG TRADERS
Bank
Fixed Deposit: MN Bank

30
PETTY CASH TRANSACTIONS

Petty cash Small cash payments made by the business – items too small to be paid by debit card,
credit card or by EFT.
A certain amount of money is withdrawn and kept available to make these small
payments. These transactions are recorded in the Petty Cash Journal. (PCJ)
Source documents used are Petty

cash vouchers
Petty cash systems

System of The petty cashier receives cash when money is required. The balance of the petty cash
variable varies (changes) from month to month as the money that is used in the month is
balances credited against the petty cash account.
The cash available at the end of the month is calculated by balancing the account.
Imprest The imprest system means that the petty cash balance at the end of the month always
system stays the same. The petty cashier is always reimbursed on the amount that has been
spent.
EXAMPLE
PETTY CASH
2024 2024
Jan 1 Bank (opening) 1 200 Jan 31 Total payments PCJ1 1 129
Balance (end) c/d 71
1 200 1 200
Feb 1 Balance b/d 71
IMPREST SYSTEM
PETTY CASH
2024 2024
Jan 1 Bank (opening) 1 200 Jan 31 Total payments PCJ1 1 129
31 Bank 1 129 Balance (end) c/d 1 200
2 329 2 329
Feb 1 Balance b/d 1 200
The full imprest amount (in this example R1 200) must be restored at the end of the month – the
balance should always be R1 200, therefore an amount of R1 129 must be issued at month-end to
ensure the balance brought down stays at R1 200

31
REQUIRED
Use the information below to complete the Petty Cash Journal of Bloemfontein Traders.
Post to the General ledger
INFORMATION
Opening Petty Cash Balance on 1 August 2023 was R500.
Transactions
Payments according to Petty Cash Vouchers:
2. Purchased postage stamps from the Post Office R20. (Voucher No. 25)
5. Paid Super Stationers for a printer cartridge R100.
8. Donated to Child Welfare, R50
12. Paid wages to the Betty Skosana the office cleaner R150.
14. Bought Refreshments from L8 Store for a visitor R60.
20. The owner, L Bloem, had left his lunch at home. Gave him R50 to buy lunch.
25. Bought envelopes from Super Stationers R30
31. Posted a parcel – postage cost was R15.
Expected Solutions
PETTY CASH JOURNAL OF BLOEMFONTEIN TRADERS - AUGUST 2023

No Day Details Petty Wages Postage Stationery Sundry Accounts
Cash
Amount Details
25 2 Post Office 20 20
26 5 Super Stationers 100 100
27 8 Child Welfare 50 50 Donations
28 12 Betty Skosana 150 150
29 14 L8 Store 60 60 Refreshments
30 20 L Bloem 50 50 Drawings
475 150 35 130 160
POSTING TO GENERAL LEDGER

BEFORE POSTING BEAR IN MIND THE FOLLOWING
Petty Cash is an Asset. When we pay out money the asset is decreasing therefore Petty Cash will be
recorded on the Credit side and the other items will be Debited.
NOTE
The system of variable balance was

used i.e. The opening balance was
R500, and the closing balance was R25.

32
SUGGESTED SOLUTION
PETTY CASH JOURNAL OF BLOEMFONTEIN TRADERS - AUGUST 2023
No Day Details Petty Wages Postage Stationery Sundry Accounts
Cash Amount Details
27 8 Child Welfare 50 50 Donation
28 12 Betty Skosana 150 150
29 14 L8 Store 60 60 Refreshments
30 20 L Bloem 50 50 Drawings
475 150 35 130 160
GENERAL LEDGER OF BLOEMFONTEIN TRADERS

BALANCE SHEET SECTION Total is of R475
DRAWINGS
Aug 20 Petty Cash 50
PETTY CASH
Aug 1 Balance b/d 500 Aug 31 Sundry a/c 475
(Total payments)
Balance c/d 25
500 500
Sep 1 Balance b/d 65
NOMINAL ACCOUNTS SECTION

WAGES
POSTAGE
Aug 2 Petty Cash 35
STATIONERY
DONATION
Aug 8 Petty Cash 50
REFRESHMENTS

33
ACTIVITY 3
REQUIRED
Use the information below to complete the Petty Cash Journal of Durban Traders.
INFORMATION
Opening Petty Cash Balance on 1 October 2023 was R700.
TRANSACTIONS
Payments according to Petty Cash Vouchers:
2. Paid LG Transporters R200 for delivery of trading stock to our shop (Voucher No. 45)
5. Paid The Stationery Shop for Envelopes R50.
8. Paid wages to the Simon Mokubu, the part time gardener R120.
12. Paid R50 for the postage on goods that we had sold.
14. Mr Durban bought flowers for his wife R105.
20. Bought stamps from the Post Office for R25.
25. Bought a new computer mouse from the Computer Shop for R130
31. Received cash from the cashier to restore the imprest.
ANSWER SHEET
PETTY CASH JOURNAL OF DURBAN TRADERS - OCTOBER 2023
Petty Trading Sundry Accounts
No Day Details Cash Stock Postage Stationery
Amount Details
NOTE
To restore the imprest means we will request the
amount we spent.

34
GENERAL LEDGER OF DURBAN TRADERS

BALANCE SHEET SECTION
DRAWINGS
EQUIPMENT
TRADING STOCK
PETTY CASH
WAGES
POSTAGE
STATIONERY

35
ACTIVITY 4
Refer to Activity 3 above and record the transactions in the table below.
A = OE + L
No Journal Account Account
credited Assets Owners’ Liabilities
debited
equity
2
5
8
12
14
20
25
31
INTERNAL CONTROL RELATING TO CASH
Internal controls on cash received

o Pre-numbered cash invoices or electronically generated till slips.
o Supervisor who collects cash must check cash against cash invoices or till slips.
o Separation of duties such as receiving cash, preparing bank deposit slips, doing
bank reconciliation, taking cash to the bank, recording entries in cash receipts journal
and general journal.
o Avoid making payments directly from cash received.
o Bank cash daily and keep it in the locked safe.
o Bank reconciliation must be done at the end of each month.
Internal controls on cash payments

o Complete, sign and authorise the payments requested.
o One person must control petty cash and petty cash slips must be signed by two people.
o Make payments via EFT, avoid cash payments.
o Check EFT payments request against invoice and other source documents.
o Separate duties of authorisation of payments and the following should be carried out by
different people: bank reconciliation, recording of entries in cash payments journal and
general journal
o Bank reconciliation must be done at the end of each month.

36
SESSION 3: CREDIT TRANSACTIONS AND CREDIT SALES
Concept Definition
Credit sales
The business sells goods on credit to clients, who will pay at a later stage.
Debtor
The person who owes money to the business. The debtors will pay the money at
a later stage, and they are therefore regarded as current assets.
Screening of debtors Check the following aspects of prospective credit customers: credit rating at the
bank, past records, proof of residential address, bank statements, employer
details, salary slip.
Credit terms The terms offered by the seller to the buyer of the maximum time allowed for
repayment
Credit limit A maximum amount allowed to buy on credit
Debtors Journal The subsidiary journal in which all the credit sales are recorded before it is posted
to the General Ledger only credit sales of trading stock are entered in the Debtors
Journal.
Debtors Ledger An account is opened in the names of each debtor – it therefore contains the
individual (personal) accounts for each debtor.
Debtors Control It contains a control between each of the debtors’ accounts and the Debtors
account Control account in the General Ledger. The total sum of the all the balances of all
the debtors accounts in the Debtors Ledger must be equal to the balance f the
Debtors Control account in the General Ledger.
Debtors list A list of all the debtors is drawn up at the end of the month. The total of this list
must be the same as the Debtors Control account.
SOURCE DOCUMENTS SUPPORTING DOCUMENT

A duplicate credit invoice issued Delivery note
The original invoice is given to the
debtor
Advantages and disadvantages of selling goods on credit

Advantages Disadvantages
 Increased sales  Some debtors may not pay back
 Increased profits  Extra admin work to keep track of debtors
 Customer loyalty is increased  The business could have cash flow
 Attracts new customers problems if debtors do not pay back on
 Selling on credit gives a competitive time.
advantage  Costs of collection may decrease profits.
 Businesses that sell most of their goods on
credit may have to borrow money to keep
up production

37
CREDIT SALES
INFORMATION A
Below are details in the books of Zizi Traders of credit invoices issued during March 2023.
Invoice Date Issued to For Amount Cost price

No.
135 5 B Baloyi Trading stock 8 500 4 250
136 12 M Martins Merchandise 10 000 5 000
INFORMATION B
Opening balances on 1 March 2023- Debtors Ledger
Name of Debtor Amount
B Baloyi R4 500 (dr)
M Martins R3 500 (dr)
REQUIRED:
Enter the transactions into the Debtor’s Journal and then post to the General Ledger.
EXPECTED SOLUTION
DEBTORS JOURNAL OF ZIZI TRADERS FOR MARCH 2023
Invoice Day Debtor Fol Sales Cost of

sales
135 05 B Baloyi DI 8 500 4 250
136 12 M Martins D2 10 000 5 000
18 500 9 250
R18 500 for sales and R9250 will be posted to Debit: Debit:
the General Ledger Debtors control Cost of sales
Credit: Credit: Trading
Sales Stock
Total sales from Debtors Journal

will be posted debit side of
debtor’s control account

38
GENERAL LEDGER OF ZIZI TRADERS

3 500 +4 500
DEBTORS CONTROL
Mar 1 Balance b/d 8 000

31 Sales DJ 18 500
SALES
Mar 31 Debtors DJ 18 500
TRADING STOCK
Mar 31 Cost of sales DJ 9 250
COST OF SALES
Mar 31 Trading stock 9 250
DEBTORS LEDGER OF ZIZI TRADERS
B BALOYI DI
Date Details Fol Debit Credit Balance
Mar 1 Account rendered 4 500
05 Credit invoice 135 8 500 13 000
M MARTINS D2
12 Credit invoice 136 10 000 13 500
Debtors Control
NOTE: The balances of the individual 8 000 + 18 500 =26 500
debtor’s accounts will equal the balance of
the Debtor’s control account Debtors’ balances
13 000 + 13 500 = 26 500

39
ACTIVITY 1
REQUIRED
Enter the following transactions into the Debtors Journal of CK Clothing. Close off the journal and post to
the General Ledger and the Debtor’s Ledger.
INFORMATION
A standard mark-up of 100% on cost is used.
Balances on 1 March 2023.
Debtor’s Control R15 000
B. Blue 7 000 Total of the
C. Cook 3 000 individual debtors
D. Dube 3 500
E. Eli 1 500
Trading Stock 24 200
Sales 48 000
Cost of sales 24 000
The following credit sales took place during March 2023:
Invoice Date Issued to For Marked

No. price
281 5 D. Dube Goods 2 500
282 12 C. Cook Goods 1 000
283 14 E. Eli Goods less 5% trade discount 4 200
284 18 B. Blue Goods 3 200
285 24 C. Cook Goods 1 500
286 30 D. Dube Goods less 20% trade discount 3 600
Cost price is calculated on marked price and

not selling price when there is trade discount.
ANSWER SHEET
DEBTORS JOURNAL OF CK CLOTHING

Invoice Day Debtor Fol Sales Cost of sales

40
GENERAL LEDGER OF CK CLOTHING
DEBTORS CONTROL
TRADING STOCK
SALES
COST OF SALES
DEBTORS LEDGER OF CK TRADERS
B BLUE DI
C COOK D2
D DUBE D3
E ELI D4

41
ILLUSTRATIVE ACTIVITY:PAYMENT RECEIVED FROM DEBTORS
INFORMATION
TRANSACTIONS FOR APRIL 2023
1. B Baloyi pays an amount of R2 100 on his account via EFT 23.
2. M Martins pays R2 600 on his account via EFT 48.
REQUIRED:
Show transactions in the CRJ
Post to the General Ledger
Post to the Debtors Ledger
EXPECTED RESPONSE
CASH RECEIPT JOURNAL OF ZIZI TRADES FOR APRIL 2023

Analysis
Doc Day Details of Bank Debtors Sundry accounts
receipts control
EFT 23 1 B Baloyi 2 100 2 100 2 100 Amount fol Details
EFT 48 2 M Martins 2 600 2 600 2 600
4 700 4 700
DEBTORS LEDGER OF ZIZI TRADERS-

Previous month - March
DEBTORS CONTROL
1 Mar Balance b/d 8 000 31 Mar Balance c/d 26 500
31 Mar Sales DJ 18 500
26 500 26 500
1 April Balance b/d 26 500
Current month - April

DEBTORS CONTROL
1 April Balance b/d 26 500 30 April Bank CPJ 4 700
Balance b/d 21 800
26 500 26 500
30 April Balance b/d 21 800
NOTE: The purpose of the activity
is to reflect how the balance will
be changed by a payment. Other
transactions such as sales, sales
returns will change the account
balance .

42

B BALOYI D1
05 Credit invoice 135 8 500 13 000
B BALOYI DI
April 1 Account rendered 13 000
EFT 23 2 100 10 900
M MARTINS D2
12 Credit invoice 136 10 000 13 500

M MARTINS D2
April 1 Account rendered 1 3 500
2 EFT 28 2 600 10 900
NOTE: Most activities will include sales

returns, payments, recording of
discounts.

43
ACTIVITY 2
INFORMATION
The following balances appeared, amongst others, in the books of Skosana Stores.
Bank R12 000

Debtor’s Control 23 000
P. Chauke 2 000
NOTE: The balance of
K. Madiseng 13 000 the Debtor’s control
K. More 6 200 account is equal to the
L. Nkosi 1 800 total of the individual
Trading inventory 22 000 debtor’s balances.
Sales 49 000
Cost of sales 24 500
All goods are sold at a mark-up of 100% on cost price
REQUIRED:
Enter the following transactions into the Debtors Journal and the Cash Receipts Journal for the
month of September 2023.
1. Credit sales to:

K. Madiseng R2 540 Invoice 720
K. More R3 750 Invoice 721
5. Received R240 from L. Nkosi as partial payment of his account via EFT 20.
8. Received R1 000 from P. Chauke in partial payment of his account via EFT 82.
15. Sold goods to L. Nkosi for R2 500.
18. K. More paid us electronically R3 500. EFT 34
22. P. Chauke purchased goods from us at a marked price of R3 000 less 5% trade
discount.
26. K. Madiseng settled his account in full. EFT 65
30. L Nkosi purchased goods marked at R2 800 less 5% trade discount.
ANSWER SHEET
DEBTORS JOURNAL OF SKOSANA STORES FOR SEPTEMBER 2023
Invoice Day Debtor Fol Sales Cost of sales

44
CASH RECEIPTS JOURNAL OF SKOSANA STORES FOR SEPTEMBER 2023

Analysis
Doc Day Details of Bank Debtor’s Sundry accounts
receipts control Amount fo Details
GENERAL LEDGER OF SKOSANA STORES

TRADING STOCK
DEBTORS CONTROL
SALES
DEBTORS LEDGER OF SKOSANA STORES

K MORE D3
Day Details fol Debit Credit Balance
L NKOSI D4
Day Details fol Debit Credit Balance

45
INFORMATION
Transactions April 2023 in the books of Zizi Traders

1. B Baloyi pays an amount of R500 on his account via EFT 010
2. M Martins pays R600 on his account via EFT 11. Allow R50 discount.
3. S Smit pays R500 in settlement of his account of R540 via EFT 012
4. Receive an EFT 013 from A Adams in settlement of his account after 5% discount is
allowed. The outstanding balance on his account was R4 100.
REQUIRED
Show transactions in the CRJ
Post to the Debtors Ledger
CASH RECEIPT JOURNAL OF ZIZI TRADES FOR APRIL 2023

Analysis
Doc Day Details of Bank Debtors Discount Sundry accounts
receipts control allowed
EFT010 1 B. Baloyi 500 500 Amount fol Details
EFT011 2 M. Martins 600 650 50
EFT012 3 S. Smit 500 540 40
EFT013 4 A. Adams 3 895 4 100 205
5 495 5 790 295
Credit Debit
Debtors 5 790 Discount 295
control allowed
Cash
Debit
received
Bank 5 790
Debtors Control:
cash received
plus discount

46
BANK
Apr 31 Total receipts 5 495
DEBTORS CONTROL
Apr 31 Bank & discount
allowed 5 790
CRJ
DISCOUNT ALLOWED
Apr 31 Debtors control 295
Post from CRJ to

DEBTORS LEDGEROF ZIZI TRADERS General Ledger
B BALOYI D1
Details Fol Debit Credit Balance
Apr 1 Account rendered 2 000
1 EFT 010 CRJ 500 1 500
M MARTINS D2
2 EFT 011 CRJ 600 1 400
Discount allowed CRJ 50 1 350
S SMIT D3
Apr 1 Account rendered 540
3 EFT 012 CRJ 500 40
Discount allowed CRJ 40 0
A ADAMS D4
4 EFT 013 CRJ 3 895 205
EFT 013 CRJ 205 0

47
ACTIVITY 3: CASH RECEIPTS JOURNAL AND POSTING
REQUIRED
Enter the following transactions into the:
• General ledger
• Debtor’s ledger
INFORMATION
You are provided with the transactions of Parker Traders for the month of November 2023.
Balances on 1 November 2023

Bank R24 500
Debtors Control ?
C. Kent 3 300
S. Mann 1 500
L. Lane 2 200
I. Hulk 5 400
TRANSACTIONS
1. C. Kent sent us R3 100 in settlement of his account. EFT 502
2. S. Mann settled his account less 5% discount.
3. L. Lane transfer EFT R1 200 on account. Allowed her R100 discount.
4. I. Hulk paid via EFT for R1 900 after 5% discount had been allowed.
ANSWER
CASH RECEIPT JOURNAL OF PARKER TRADERS FOR NOVEMBER 2023

Analysis
Doc Day Details of Bank Debtors Discount Sundry accounts
receipts control allowed

48
GENERAL LEDGER OF PARKER TRADERS
BANK
DEBTORS CONTROL
DISCOUNT ALLOWED
DEBTORS LEDGER OF PARKER TRADERS
C. KENT D1
Nov 1 Account rendered 3 300
S. MANN D2
L LANE D3
I HULK D4

49
ACTIVITY 4
REQUIRED:
Use the information provided in Activity 3 and complete the Table below.
A = OE + L
No Journal Account Account
debited credited Assets Owners’ Liabilities
equity
1

50
DEBTORS’ ALLOWANCES
Reasons for returning goods by debtors:
 They may not be what was ordered

 They may be damaged
 Inferior quality of goods
 Goods that are faulty (e.g., electrical goods)
 The order may be incomplete
 Incorrect/damaged packaging
SOURCE DOCUMENT Once a credit note

When the business receives the debit note from a debtor, they has been issued, an
issue an original credit note to the debtor, and keeps the entry will be made
duplicate credit note. in the Debtor’s
This DUPLICATE CREDIT NOTE is the source document. Allowances Journal.
REQUIRED
Enter the transactions below into the Debtor’s allowance Journal of Zizi Traders
Post to the General Ledger and the Debtor’s Ledger.
INFORMATION
Goods are sold at 100% profit mark-up
Transactions – May 2023

20 – Received damaged goods returned by B Baloyi together with a debit note, R500.
Issued credit note No. 005
25 – Issued a credit note 006 to M Martins for R600.
DEBTORS ALLOWANCE JOURNAL OF ZIZI TRADERS FOR MAY 2023

Doc Day Debtor Fol Debtors’
allowances Cost of sales
CN005 20 B. Baloyi 500 250
CN006 25 M. Martins 600 300
1 100 550
Credit note
When goods are returned it Debit Debit
Debtors’ allowances Trading stock
means that the sale was
Credit Credit
cancelled. Therefore, the cost Debtors control Cost of sales
of sales must also be
cancelled.

51
ACTIVITY 5
REQUIRED:
Enter the following transactions into the Debtor’s Allowances Journal of James Johnson Stores
for the month of May 2023.
INFORMATION
Below you will find the transactions for James Johnson Stores. A mark-up of 100% on cost is
used.
Balances on 1 May 2023

Debtor’s control 15 000
M. Matthew 5 000
M. Mark 9 000
L. Luke 1 000
Trading stock 24 000
Sales 19 000
Cost of sales 8 000
Debtor’s allowance 700
Transactions
1. M. Matthew returned goods to the value of R1 000 together with a debit note.
Issued credit note No. 07
5. M. Mark claimed an allowance for Trade discount that had not been indicated
on the invoice. We issued a credit note to the value of R600.
10. Credit note issued to L. Luke for R150 for goods returned.
18. M. Mark returned goods and we sent him a credit note for R100.

52
ANSWER SHEET
DEBTORS ALLOWANCE JOURNAL OF JAMES JOHNSON STORES FOR MAY 2023

Doc Day Debtor Fol Debtors
allowances Cost of sales
GENERAL LEDGER OF JAMES JOHNSON STORES
DEBTORS CONTROL
May 1 Balance b/d 15 000
TRADING STOCK
SALES
COST OF SALES
DEBTORS ALLOWANCES
May 1 Balance b/d 700

53
DEBTORS LEDGER OF JAMES JOHNSON STORES
M. MATTHEW D1
May 1 Account rendered 5 000
M MARK D2
L. LUKE D3
ACTIVITY 6: DEBTORS CONTROL ACCOUNT
REQUIRED
Use the information and answers the questions that follow
INFORMATION
DEBTORS CONTROL
2023 1 Balance b/d 7 300 2023 31 B CRJ 4 700
Mar. Mar.
31 A DJ 12 170 Debtors C 540
allowances
Petty cash PCJ 250 Balance c/d 15 050
Bank CPJ 570
20 290 20 290
Apr. 1 Balance b/d 15 050

54
ANSWER SHEET
DEBTORS CONTROL ACCOUNT
6.1 Which account will be credited because of the entry of R12 170 on the debit side of
the Debtors Control Account?
6.2 State ONE possible reason for the entry of R570 on the debit side of the Debtors
control account.
6.3 From which journal is the entry of R540 posted?
6.4 Identify TWO accounts that will be debited because of R4 700 transferred from CRJ?
6.5 Give ONE example of a transaction that will result in the petty cash entry of R250.
6.6 Calculate the cost price for goods sold for R540 recorded on the credit side of the
Debtors Control Account if the profit mark-up on cost is 25%. Show your calculations.
6.7 Which source document will support the entry of R540 on the credit side of the
Debtors Control Account?

55
ACTIVITY 7: JOURNALS AND POSTING
REQUIRED:
7.1 Record the transaction in the Debtor’s Journal and Debtor’s Allowance Journal.
7.2 Post to the General ledger.
7.3 Draw up the Debtor’s Ledger
7.4 Compile a Debtors List on 31 July 2023.
INFORMATION
Happy Stores sells goods for cash and on credit.
On 1 July 2023 the balances of the debtors are as follows:
B. Blue R5200
P. Pink R4300
Y. Yellow R1200
Other balances/totals on 1 July 2023 are as follows:

Trading stock R15 600
Debtors Control ?
Sales R43 200
Debtors’ allowances R5 600
Cost of Sales R19 700
Transactions
The following are some of the transactions which occurred during July 2023.
5 Sold merchandise on credit to Y. Yellow for R1 340 (cost price R652). Inv. No AB 21
7 Y. Yellow complained about the quality of the goods supplied to him on the 5 th. He
returned the goods and we issued CN No B51 for R340 (CP R120).
10 Issued an invoice to P. Pink for R720. These goods were subject to a 20% mark up on
cost.
12 P. Pink returned unsatisfactory goods sold to him on the 10th. We issued a CN for
R240.
Sent an invoice for R900 to B. Blue for goods sold to him. (cost price R675).
15 B.Blue informed us that he had been overcharged by R100 on the 12 th. Issued a credit
note.
20 Supplied merchandise to Y. Yellow for R2 760. Issued an invoice for this amount. (CP
– R1200)
24 Yellow returned goods and we issued a CN for R320. (CP – R100)
B. Blue received an invoice from Happy Stores for R750. These goods were subject to
a mark-up of 50% on cost.
27 Blue sent back goods that he had not ordered to the value of R150. We processed this
transaction.
29 P. Pink bought goods on credit from Happy Stores. The invoice indicated and amount
of R1 170 and were subject to a mark-up of 30% on cost.
31 P. Pink complained that the goods received by him were of an inferior quality. He
agreed to keep the goods on condition that we reduced his account by R250.

56
ANSWER SHEET
DEBTOR’S JOURNAL OF HAPPY STORES FOR JULY 2023

Doc Day Debtor Fol Debtors’ Cost of
allowances sales
DEBTOR’S ALLOWANCES JOURNAL OF HAPPY STORES FOR JULY 2023

Doc Day Debtor Fol Debtors’
allowances Cost of
sales
GENERAL LEDGER OF HAPPY STORES
DEBTORS CONTROL
TRADING STOCK

57
SALES
COST OF SALES
DEBTORS ALLOWANCES
DEBTORS’ LEDGER OF HAPPY STORES
B. BLUE D1
P. PINK D2
Y. YELLOW D3

58
DEBTOR’S LIST
Debit Credit
INTERNAL CONTROLS RELATING TO DEBTORS
o The business should have a credit policy in place.

o Screen debtors before approving credit sales.
o If debtors’ system is not electronic, use pre-numbered invoices.
o Do regular checks on debtors’ accounts and follow up long outstanding debts.
o Charge interest on overdue accounts.
o Reconcile debtors’ control account with debtors’ ledger.
o All adjustments to debtors’ accounts or writing off bad debts should be authorised by the senior
personnel (employee).

59
SESSION 4: CREDIT PURCHASES
CREDIT PURCHASES
Is a financial transaction that allows a business or individuals to buy goods and services on credit,
payment is made later. Items bought by a business are trading stock, assets such as equipment,
consumables stock and stationery.
When goods are purchased on credit the supplier (creditor) will send an original invoice to the business
and he will keep the copy of the invoice. The invoice will indicate the items that have been bought, the
total amount owing and the trade discount if any.
The transaction is entered in the Creditors’ Journal and posted to the creditor’s personal account in the
Creditors’ Ledger
Concepts Definition
Creditor The persons/businesses to whom the business owes money
Creditors Journal The subsidiary journal in which credit purchases are recorded
Creditors Ledger Individual accounts are opened for each creditor
Creditors Control account This account is a summary of the personal accounts of all the
creditors in the general ledger
Creditors list A list of all the creditors is drawn up at the end of the month.
The total of this list must correspond with the creditors control
account.
Creditors Allowance It is a journal that records all the goods that have been
Journal returned by a business to the suppliers.
Debit note A document sent to the supplier, it reflects the allowance that
must be given for unsatisfactory goods.
Credit note Sent by a seller(supplier) to a customer (business) when goods
are returned to reverse or cancel the invoice or part of an
invoice.
Trade discount Discount given to traders or retailers to promote bulk-buying of
goods and services.
NOTE: When goods are returned a credit note or debit note will be used to support the recorded
transaction.
SOURCE DOCUMENT SOURCE DOCUMENT

The business sends an original Original credit note received from
debit note to the creditor. the creditor
The entry in the books is made
from the debit note. The source
document is the issued by
DUPLICATE DEBIT NOTE supplier
issued by
the business

60
PROCEDURE FOLLOWED WHEN GOODS ARE PURCHASED ON CREDIT
Step 1 An order form will be submitted to the supplier, indicating exactly which goods
are required. (It must be authorised by the senior personnel)
Step 2 The supplier will make up the order and send it to the business together with a
delivery note/invoice.
Step 3 The goods delivered will be checked against the delivery note to make sure that
the order is complete.
Step 4 If the invoice is correct, it will be stamped and sent to the accounts department.
Step 5 The invoice will be checked against the order form to make sure that the order
has been correctly completed. If it has not, then a follow-up must be made with
creditors.
Step 6 Record the invoice in the Creditor’s journal.
Step 7 The Creditor’s journal will be posted to the:

 General ledger (creditors control account)
 Creditor’s ledger
Step 8 At the end of the month statements will be received from the suppliers
(creditors) indicating how much money is owed by the business.
Step 9 o The statement will be checked against the records of the creditors’accounts.
o Transactions for each individual creditor will be compared with the statement
before money is paid or transferred to creditors.
Step 1,2,3,4.5,9 are internal control processes
CREDITORS JOURNAL AND POSTING
When goods have been purchased, the business will receive an original invoice together with the
goods. Once the goods have been checked against the invoice, the invoice will be used to make
an entry in the Creditor’s journal.
Checking of an invoice against physical goods is an

internal control process

61
ILLUSTRATIVE ACTIVITY: CREDITOR’S JOURNAL
REQUIRED:
Enter the transactions into the Creditor’s Journal for March 2023.
Post to the General Ledger and to the Creditor’s Ledger.
INFORMATION:
Below are the transactions of Zizi Traders for March 2023.
Transactions March 2023

5. Bought trading stock from ABC Traders R20 000. Invoice 109
13. Bought the following from Didi Traders: merchandise R5 000, stationery R1 100
27. Bought the following from Nqidi Traders: trading stock R10 000 less 10% trade
discount, and R500 packing material.
31. Buy a computer from Sesoko Traders for R5 000.
A trade discount of R1 000 is

not reflected in the creditors
journal
EXPECTED SOLUTION
CREDITORS JOURNAL OF ZIZI TRADERS FOR MARCH 2023

Creditors Trading Stationery
Doc Day Creditor fol Control stock Sundry accounts
109 5 ABC Traders 20 000 20 000
110 13 Didi Traders 6 100 5 000 1 100
111 27 Nqidi Traders 9 500 9 000 500 Packing
material
112 31 Sesoko Traders 5 000 5 000 Equipment
40 600 34 000 1 100 5 500
Posting to the ledger Credit Debit

Creditors All other accounts
control
From the Creditor’s journal post to the

credit side of creditor’s control
Internal Control account.
check above, invoices
are pre-numbered

62
CREDITORS CONTROL
31 Total CJ 40 600
purchases
TRADING STOCK
Mar 30 Creditor’s control CJ 34 000
EQUIPMENT
STATIONERY
PACKING MATERIAL
Mar 30 Creditor’s control CJ 500
CREDITORS LEDGER OF ZIZI TRADERS
ABC TRADERS C1
Mar 1 Account rendered 2 000 Cr
5 Invoice No 9 CJ 20 000 22 000 Cr
DIDI TRADERS C2
13 Invoice No 10 CJ 6 100 8 100 Cr
NQIDI TRADERS C3
27 Invoice 11 CJ 9 500 11 500 Cr
SESOKO TRADERS C4
Date Details Fol Debit Credit
Mar 30 Invoice No. 12 CJ 5 000 5 000 Cr

63
ACTIVITY 1: CREDITORS JOURNAL AND POSTING
REQUIRED:
• Enter the balances in the General Ledger and Creditor’s Ledger of Tiny Traders on 1 August 2023.
• Enter the transactions below into the Creditor’s Journal for August 2023.
• Close the Journal and Post to the General Ledger.
• Post to the Creditor’s Ledger
INFORMATION
The information given below relates to the books of Tiny Traders for the month of August 2023.
Balances on 1 August 2023

Creditor’s control 39 210
A. Little 20 210
B. Small 12 400
C. Mini 2 100
D. Petite 4 500
Equipment 65 000
Trading Inventory 43 000
Stationery 6 700
Packing material 4 700
TRANSACTIONS
1. Purchased goods from B. Small for R18 000 less 10% trade discount. Inv. No. 731
5. Received an invoice from D. Petite for Trading Inventory R7 000 and stationery
R1 200.
8. Received an invoice from C. Mini for a new computer for R7 800 as well as a new
printer cartridge for R600.
12. Bought packing material from A. Little for R2 500.
16. Bought stationery from C. Mini R2 000 and received a trade discount of 5%.
20. Purchased stationery for R1 600 and packing material for R2 800 from B. Small and
received 10% trade discount on both items.
22. D. Petite sold us Trading stock to the value of R3 200.
28. A. Little sent us an invoice for R600 for repairs to our cash register.

64
ANSWER SHEET
CREDITORS JOURNAL OF TINY TRADERS FOR AUGUST 2023
Creditor’s Trading Stationery
Doc Day Creditor fol Control stock Sundry accounts
GENERAL LEDGER OF TINY TRADERS

CREDITORS CONTROL
TRADING STOCK
EQUIPMENT
STATIONERY
PACKING MATERIAL
REPAIRS

65
CREDITORS LEDGER OF TINY TRADERS
A. LITTLE C1
A. SMALL C2
B. MINI C3
C. PETITE C4

66
ILLUSTRATIVE ACTIVITY: PAYMENTS TO CREDITORS
REQUIRED
Use the information in the previous example. Enter the following transactions in the books of Zizi Traders
INFORMATION Payments can be

made through
TRANSACTIONS MARCH 2023 electronic transfer,
credit cards, debit
1. Paid via EFT 007 to ABC Traders in settlement of our account. cards and cash
2. Paid via EFT 008 to Didi Traders for R2 000.
3. Paid Nqidi Traders R1 500 in part payment of our account. EFT 009.
EXPECTED SOLUTION
CASH PAYMENT JOURNAL OF ZIZI TRADERS FOR MARCH 2023

Doc Day Details Bank Creditors Sundry accounts
control Amount fol Details
EFT007 1 ABC Traders 22 000 22 000
EFT008 2 Didi Traders 2 000 2 000
EFT009 3 Nqidi Traders 1 500 1 500
25 500 25 500
BANK
Mar 31 Creditors Control CPJ 25 500
CREDITORS CONTROL
Mar 31 Bank CPJ 25 500 Mar 1 Balance b/d 6 000

31 Total purchases CJ 40 600

67
ABC TRADERS C1
5 Invoice No 9 CJ 20 000 22 000 Cr
EFT No. 7 CPJ 22 000 0
DIDI TRADERS C2
13 Invoice No 10 CJ 6 100 8 100 Cr
EFT No. 8 CPJ 2 000 6 100 Cr
NQIDI TRADERS C3
27 Invoice 11 CJ 9 500 11 500 Cr
EFT No. 9 CPJ 1 500 10 000 Cr
SESOKO TRADERS C4
Mar 30 Invoice No. 12 5 000 5 000 Cr

68
ACTIVITY 2: PAYMENTS TO CREDITORS
REQUIRED:
• Enter the balances into the General Ledger of JL Retailers.
• Enter the transactions below into the Cash Payments journal and the Creditor’s Journal.
• Close off the Journals and post to the General Ledger.
• Post to the Creditor’s Ledger.
• Draw up a Creditor’s List.
INFORMATION
Below is the information for JL Retailers for the month of June 2023.
Balances on 1 June 2023:

Bank R35 000
Equipment 27 000
Creditor’s Control 15 640
Mac Wholesalers 3 400
Steer Suppliers 4 300
Casbah Warehouse 5 400
Spur Traders 2 540
Stationery 5 600
Advertising 2 700
TRANSACTIONS
1. Purchased the following on credit from Steer Suppliers:
Merchandise R14 000 less 5% trade discount.
Stationery R2 100. Received Invoice No. 861
2. Bought the trading inventory on credit from Mac Wholesalers for R6 900.
4. Paid via EFT No 465 to Spur Traders to settle their account on 1 June 2023.
10. Bought stationery R460 and packing material R360 from Casbah Warehouse on
credit.
16. Paid via EFT to Steer Suppliers for R8 200 on account.
20. Received an invoice from PN Newspaper for advertising R750.
22. Paid via EFT to Mac Wholesalers to settle our account to date.
26. Bought a new computer from Spur Traders for R8 700.
28. Received an invoice from Steer Suppliers for:
Goods, R3 700
Stationery R1 200.
29. Bought a new printer from Spur Traders for R2 000.
30. Paid via EFT to Steer Suppliers to settle our account to date.

69
ANSWER SHEET
CREDITORS JOURNAL OF JL RETAILERS FOR JUNE 2023

Creditor’s Trading Packing
Doc Day Creditor fol Control stock Stationery material Sundry
accounts
CASH PAYMENTS JOURNAL OF JL RETAILERS FOR JUNE 2023

Doc Day Details Bank Creditors Sundry accounts
control Amount fo Details
GENERAL LEDGER OF JL RETAILERS
BANK
CREDITORS CONTROL

70
TRADING STOCK
EQUIPMENT
CREDITORS LEDGER OF JL RETAILERS
MAC WHOLESALERS C1
STEER SUPPLIERS C2
CASBAH WAREHOUSE C3

71
SPUR TRADERS C4
PN NEWSPAPERS C4
ACTIVITY 3 :ANALYSIS OF TRANSACTIONS
REQUIRED
Use the information in Activity 1 to complete the table below.
A = OE + L
Owners Lia-
Journal Account debited Account credited Assets equity bilities
1
2
4
10
16
20
22
26
28
29
30

72
ILLUSTRATIVE ACTIVITY: DISCOUNT RECEIVED FROM CREDITORS
REQUIRED
• Prepare the Cash Payment Journal of ABC Traders Discount received is
• Post to the General Ledger an income, it is
credited in the
• Post to the Creditors ledger
General Ledger
INFORMATION
Balance on the 1 October 2023.
Bank R27 000

Creditor’s control R33 000
Rugby Wholesalers R17 000
Soccer Mega Store R13 500
Hockey Hyper R2 500
TRANSACTIONS
1. Paid Rugby Wholesalers R15 000 on account. Paid via EFT no. 845
2. Paid Hockey Hyper via EFT to settle their account less 5% discount.
3. Paid Soccer Mega Store via EFT for R12 000 in full settlement of their account.
4. Settled the outstanding amount with Rugby Wholesalers, less 10% discount.
EXPECTED SOLUTION
CASH PAYMENT JOURNAL OF ABC TRADERS FOR OCTOBER 2023

Doc Day Details Bank Creditors Discount Sundry accounts
control received Amount fol Details
EFT845 1 Ruby Wholesalers 15 000 15 000
EFT846 2 Hockey Hyper 2 375 2 500 125

EFT847 3 Soccer Mega Store 12 000 13 500 1 500
EFT848 4 Rugby Wholesalers 1 800 2000 200
31 175 33 000 1 825

73
GENERAL LEDGER OF ABC TRADERS
BANK
Oct 1 Balance b/d 27 000 Oct 31 Sundry a/c 31 175
Total (payments)
31 175 + 1 825 = 33 000
CREDITORS CONTROL
Mar 31 Bank & Discount 33 000 Oct 1 Balance b/d 33 000
received
DISCOUNT RECEIVED
Oct 31 Creditor’s control 1 825
CREDITORS LEDGER OF ABC TRADERS
RUGBY WHOLESALERS CI
Oct 1 Account rendered 17 000 Cr
1 EFT 845 CPJ 15 000 2 000 Cr
4 EFT 849 CPJ 1 800 200 Cr
4 Discount received CPJ 200 0
SOCCER MEGA STORE C2

13 EFT 847 CPJ 12 000 1 500 Cr
Discount received CPJ 1 500 0
HOCKEY HYPER C3
2 EFT 846 CPJ 2 375 125 Cr
Discount received CPJ 125 0

74
ACTIVITY 4
REQUIRED:
• Enter the transactions below into the Creditor’s Journal and Cash Payments Journal of JR
Greengrocers for February 2023.
• Post to the General Ledger
• Post to the Creditor’s Ledger
INFORMATION
The following balances appeared in the books of JR Greengrocers on 1 February 2023.
Bank R42 000

Trading Inventory R28 500
Equipment R65 000
Creditor’s control R42 000
Banana Wholesalers R13 000
Mango Mega Store R18 500
Grapefruit Hyper R10 500
Stationery R7 300
Discount Received R2 340
TRANSACTIONS
5. Paid Grapefruit Hyper R5 600 (EFT No. 640). Discount allowed by them R400.
9. Bought goods on credit from Mango Mega Store for R400 (Inv. 362)
10. Settled the amount owing to Banana Wholesaler less 5% discount.
15. Received the equipment R1 200 and stationery R800 ordered on credit from Grapefruit
Hyper.
18. Apple Electrical repaired our refrigerator and gave us an invoice for R590.
23. Purchased stationery from Banana Wholesalers for R820.
27. Settled the amount owing to Grapefruit Hyper less R800 discount.
28. Settled the amount owing to Apple Electrical (see 18th) to take advantage of a 10%
discount for early settlement.

75
ANSWER SHEET
CREDITORS JOURNAL OF JR GREENGROCERS FOR FEBRUARY 2023

Creditor’s Trading
Doc Day Creditor fol Control stock Stationery Sundry accounts
CASH PAYMENTS JOURNAL OF JR GREENGROCERS FOR FEBRUARY 2023

Doc Day Details Bank Creditors Discount Sundry accounts
control allowed Amount
Details
GENERAL LEDGER OF JR GREENGROCERS

BANK
CREDITORS CONTROL
TRADING STOCK

76
EQUIPMENT
STATIONERY
DISCOUNT RECEIVED
CREDITORS LEDGER OF JR GREENGROCERS
BANANA WHOLESALERS CI
MANGO MEGA STORE C2

GRAPEFRUIT HYPER C3
APPLE ELECTRICAL C4

77
ILLUSTRATIVE ACTIVITY: CREDITORS’ ALLOWANCE JOURNAL

REQUIRED
• Use the transactions to enter the Creditors’ Allowance Journal of Zizi Traders.
• Post to the General Ledger
• Post to the Creditors ledger
INFORMATION
Debit notes issued for May 2023
No Date To whom issued Reason Amount

23 02 Nqidi Traders Return of packing material not ordered R79
24 07 Didi Traders Omission of 15% trade discount on invoice R3 200
25 12 ABC Traders Damaged goods R1 700
EXPECTED SOLUTIONS
CREDITORS ALLOWANCE JOURNAL OF ZIZI TRADERS
Creditors Trading Packing
Doc Day Creditor fol Control stock material Sundry accounts
23 2 Nqidi Traders 79 79
24 7 Didi Traders 480 480
25 12 ABC Traders 1 700 1 700
2 259 2 180 79
Debit Credit
Creditors control All other accounts
When the business return goods or request

allowance for an overcharge, they will send a
debit note to the supplier
When the supplier (creditor) approves the

return or allowance he will issue a credit
note.

78
GENERAL LEDGER OF ZIZI TRADER
CREDITORS CONTROL
May 31 Total allowances 2 259 May 1 Balance b/d 17 880
TRADING STOCK
31 Creditor’s control 2 180
PACKING MATERIAL
31 Creditor’s control 79
ABC TRADERS CI
May 1 Account rendered 2 000 Cr
12 Debit note 25 1 700 300 Cr
DIDI TRADERS C2
7 Debit note 24 480 1 520 Cr
NQIDI TRADERS C3
2 Debit note 23 79 1 921 Cr

79
ACTIVITY 5: CREDITORS ALLOWANCES
REQUIRED:
Enter the following transactions into the Creditor’s Allowance journal
Post to the Creditor’s Ledger.
INFORMATION
The information below applies to Right Way Wholesalers.
The balances on 1 Nov 2023 are as follows:
Equipment R47 000

Creditor’s Control 49 300
L. Radebe 13 200
G. Skosana 14 500
C. McCarthy 9 500
S. Pienaar 12 100
Stationery 14 300
TRANSACTION
1. We returned damaged goods to G. Skosana, R1 780. debit note 87.

4. We discovered that we had been overcharged for stationery bought from C.
McCarthy. Sent a debit note for R625.
8. We returned packing material to the value of R800 to S. Pienaar. The packing
material was not as ordered.
10. Equipment purchased from L. Radebe was faulty. We returned it together with a
debit note for R4 700.
15. Packing material, to the value of R820, bought from G. Skosana was damaged. We
returned it with a debit note.
20. We had bought Trading stock from S. Pienaar. He sent us a credit note for R360 for
trade discount that had not been given to us.

80
CREDITORS ALLOWANCE JOURNAL OF RIGHT WAY WHOLESALERS.

Creditors Trading Packing
Doc Day Creditor fol Control stock material Sundry accounts
GENERAL LEDGER OF RIGHT WAY WHOLESALERS
EQUIPMENT
CREDITORS CONTROL
TRADING STOCK
PACKING MATERIAL
STATIONERY

81
CREDITORS LEDGER OF RIGHT WAY WHOLESALERS
L. RADEBE C1
G. SKOSANA C2
C. McCarthy C3
S. PIENAAR C4
Internal controls in relation to creditors

 Complete, sign and authorise order forms when credit purchases are requested.
 Separate duties of ordering goods and service, authorising purchases, receiving
goods or inspecting goods delivered, requesting payment, recording payment in
Cash Payments Journal, and making entries in General Journal.
 Check goods or services against invoices, sign invoices or issue goods receipt
note.
 Reconcile Creditors’ Control account with Creditors’ Ledger before and pay
creditors on time to avoid interest.

82
SESSION 5: GENERAL JOURNAL
INTRODUCTION
General Journal is a book of first entry, it is an all-purpose journal. It is a record for all
transactions, amongst others they include correction of errors, record adjustments used to
update financial statements etc. The general journal and the general ledger use a common
method to handle transactions, a transaction will have a debit and a credit entry.
NOTE: Adjustments and financial

statements will be covered in term two and
three.
Concepts Explanation
Journal entry It indicates the account must be debited and the account that must
be credited.
Narration It is a short explanation of the transaction, called a journal narration.
A variety of transactions are recorded in the general journal and
narrations are important for internal control and audit processes.
Journal voucher Is a source document used to record specific financial transactions,
they have unique numbers. Vouchers are authorised by a senior
staff member.
Interest on overdue Interest charged to debtors or by creditors on accounts that are
accounts overdue (not paid). A business will apply a fixed rate to calculate the
interest. Interest is added to the original debt.
Bad debts Amount of money owing for goods and services provided to a debtor
which cannot be recovered. When a business struggles to recover
the debt, they write off the amount as irrecoverable or bad debt.
Subsidiary journals covered:
 Cash Receipt Journal

 Cash Payment Journal
 Petty Cash Journal
 Debtors Journal
 Creditors Journal
 Debtors Allowance Journal
 Creditors Allowance Journal
General Journal – is also classified as a subsidiary journal
NOTE: ALL transactions must first be entered in one of the subsidiary journals before they are
posted to the ledger.

83
FORMAT OF THE GENERAL JOURNAL

ILLUSTRATIVE ACTIVITY Totals
represented by
Date Transaction 6,7,8 and are
7 February 2023 Interest of R30 is charged on the overdue account of A Adams. transferred to
the general
ledger
GENERAL JOURNAL OF ZIZI TRADERS
Debtors Creditors
control control
Date Details fol Debit Credit Dr Cr Dr Cr
7 A Adams (2) 30 30
Feb Interest income (3) (2) 30
(1) Charged interest on account of (3) (4)
A Adams (5)
(6) (7) (8) (9)
A Adams is a debtor,
(1) The date of the transaction his account is debited
(2) The account debited (A. Adams) and the amount (R30) debited in the debtors control
(3) The account credited (interest income) and amount (R30) credited
(4) If a debtor’s or creditor’s account is affected, the amount must also be entered in the
Debtor’s / Creditor’s control column.
(5) Narration – this is a short explanation of the transaction.
At the end of the month, transactions in the General Journal are posted to the General Ledger
GENERAL LEDGER
DEBTORS CONTROL
Feb 28 Balance b/d Feb 28 Journal credits (7)
Journal debits (6)
CREDITORS CONTROL
Feb 28 Journal debits (8) Feb 28 Balance b/d
Journal credits (9)
INTEREST INCOME
Feb 28 A Adams 30
DEBTORS LEDGER
B Baloyi D1
Mar 1 Account rendered 200
Interest 30 230

84
ILLUSTRATIVE ACTIVITY: BAD DEBTS WRITTEN OFF

REQUIRED
1. Show the following transaction in the General Journal, General and Debtors ledger
2. Show the effect on the accounting equation
INFORMATION
EXTRACT FROM PRE-ADJUSTMENT TRIAL BALANCE ON 28 FEBRUARY 2023
Debtors control 100 000

Bad debts 500
ADJUSTMENT
The balance of R300 of the account of B Baloyi, a debtor, must be written off as irrecoverable.
EXPECTED ANSWER
Debtors control
Debit Credit Dr Cr
31 Bad debts 300
B Baloyi 300 300
Write off the account of B Baloyi as bad debt
Recorded as a
journal credit in the
Debtors Control
GENERAL LEDGER OF ZIZI TRADERS Account
DEBTORS CONTROL
Feb 28 Balance b/d 100 000 Feb 28 Journal credits GJ 300
BAD DEBTS
Feb 28 Total b/d 500
B Baloyi GJ 300
DEBTORS LEDGER
B Baloyi D1
Jan 1 Account rendered 300
31 Journal GJ 300 0
Show the effect on the accounting equation

Accounting equation
Account debit Account credit A OE L
Bad debts Debtors control -300 -300 0

85
ACTIVITY 1: BAD DEBTS WRITTEN OFF
REQUIRED
Use the information provided to show the following in the books of Zizi Traders:
1.1 Show the transactions in the Cash Receipt Journal and General Journal
1.2 Post to the General Ledger
1.3 Post to the Debtors Ledger
INFORMATION
Transactions for January 2023
9 A debtor, S Smit, who has not paid his debts for a certain period of time, cannot be
found. His balance of R150 in his account must be written off as irrecoverable.
12 A debtor, M Maseko, was declared insolvent. Received 40 cent in the rand from his
estate. His debt was R200. The balance must be written off as irrecoverable.
23 R. Botha (debtor) is declared insolvent. His insolvent estate pays a first and final
dividend of 20 cents in the rand via EFT 292. Write the balance off as irrecoverable.
ANSWER SHEET
GENERAL JOURNAL OF ZIZI TRADERS FOR JANUARY 2023 GJ9

Debtors Control Creditors Control
Fol DEBIT CREDIT Debit Credit Debit Credit
CASH RECEIPT JOURNAL OF ZIZI TRADERS FOR JANUARY 2023 CRJ 9

Debtors Sundry accounts
doc day Details Bank Control Amount Details

86

DEBTORS CONTROL B9
Jan 1 Balance b/d 1 810
BAD DEBTS N9
S Smit DI
M Maseko D2
R Botha D3
Jan 1 Account rendered ??

87
ILLUSTRATIVE ACTIVITY: INTEREST ON OVERDUE ACCOUNTS OF DEBTORS
REQUIRED
Charge the overdue account of G. Scoop, R400, with 12% interest per annum for three months. Show the
following in the books of Zizi Traders.
• Show the transactions in the General Journal Interest

• Post to the General Ledger accounts 400 x 12% x 3/12 = 12
• Post to the Debtors Ledger accounts
• Show the effect on the accounting equation
EXPECTED SOLUTION

Debit Credit Debit Credit Debit Credit
31 G Scoop 12 12
Interest on overdue debtors 12
Interest on overdue account at
12% p.a. for three months
DEBTORS CONTROL
31 Journal debits GJ 12
INTEREST ON OVERDUE DEBTORS

Jan 31 G Scoop GJ 12
G Scoop D1
31 Journal GJ 12 412
SHOW THE EFFECT ON THE ACCOUNTING EQUATION

Accounting equation
Account debited Account credited A OE L
Debtors control Interest on overdue debtors
+12 +12
(Income account)

88
ILLUSTRATIVE ACTIVITY: INTEREST ON OVERDUE ACCOUNTS OF CREDITORS
REQUIRED
Bon Distributors (a creditor) charged the business’s overdue account with 18% interest per annum for four
months. The business owes R10 200 to Bon Distributors.
Show the following in the books of Zizi Traders.
• Show the transactions in the General Journal
• Post to the General Ledger accounts 10 200 x 18% x 4/12 = 612
• Post to the Creditors Ledger account
EXPECTED SOLUTION

Debit Credit debit credit debit credit
Interest on overdue creditors 612
Bon Distributors 612 612
Interest charged on overdue
account at 18% p.a.
CREDITORS CONTROL
31 Journal credits GJ 612
INTEREST ON OVERDUE CREDITORS

Mar 31 Bon Distributors GJ 612
Bon Distributors C1

Journal GJ 612 10 812

89
DRAWINGS AND DONATIONS OF STOCK

INFORMATION
Transactions on 31 January 2024
1 The owner of Zizi Traders takes merchandise for his own use. The selling price of the
goods is R500 (cost price R300).
2 Mandela Children's fund asked the business to donate goods. The business decides to
donate R2 300 (cost price) worth of goods.
REQUESTED
1. Show the transactions in the General Journal
2. Post to the General Ledger
EXPECTED SOLUTION
GENERAL JOURNAL OF ZIZI TRADERS FOR JANUARY 2024

DEBIT CREDIT debit credit debit credit
31 Drawings 300
Trading stock 300
The owner took goods for
personal use at cost.
31 Donations 2 300
Trading stock 2 300
Donated goods to Mandela’s
Children Fund.
OR

3` Drawings 300
Donations 2 300
Trading stock 2 600
Owner takes stock at cost
and donates stock to
Mandela’s Children fund

90
DRAWINGS
31 Trading Stock 300
TRADING STOCK
Jan 1 Balance b/d 2 000 Jan 1 Drawings b/d 300
31 Donations GJ 2 300
DONATIONS
Jan 1 Total b/d 500
Trading Stock 2 300

91
ILLUSTRATIVE ACTIVITY: CORRECTION OF ERRORS
Information in the books of Zizi Traders for February 2024:

Pronto Distributors is
Debtors' list on 29 February 2024 a creditor and a
debtor.
S. Nel (Dr) R 380
Pronto Distributors (Dr) R4 200
B. Bouwer (Dr) R1 200
Courke Traders (Cr) R 310
Dumini Ltd. (Dr) R1 980
Creditors' list on 29 February 2024

Pronto Distributors (Cr) R1 250
Courke Traders (Cr) R3 400
Dumini Ltd. (Dr) R 300
Gouws Manufacturers (Cr) R8 400
REQUIRED
The following needed to be recorded in the General Journal on 29 February 2024:

• Transfer the credit balance of Pronto Distributors in the Creditors' ledger to the Debtors' ledger.
EXPECTED SOLUTION
GENERAL JOURNAL OF ZIZI TRADER

Pronto Distributors 1 250 1 250
Pronto Distributors 1 250 1 250
Transfer balance to Debtors
ledger
0 1 250 1 250 0
Original balances
Dr Debtor’s Ledger: Pronto Cr Dr Creditors Leger: Pronto Cr

Balance 4 200 Balance 1 250
Transferred balance
Dr Debtor’s Ledger: Pronto Cr Dr Creditors Leger: Pronto Cr

Balance 4 200 Creditors Ledger: 1 250 Debtor’s Ledger: 1 250 Balance 1 250
Pronto Pronto
The new balance is 4 200 – 1 250 = 2 950 Zero balance

92
PRONTO DISTRIBUTORS D1
Feb 1 Account rendered 4 200
Journal 1 250 2 950

PRONTO DISTRIBUTORS C1
Feb 1 Account rendered 1 250
Journal 1 250 0
DEBTORS CONTROL
Feb 1 Balance b/d 200 000 Feb 29 Journal credits 1 250
CREDITORS CONTROL
Feb 29 Journal debits 1 250 Feb 1 Balance b/d 150 000

93
ACTIVITY 2
INFORMATION
Use the information in the books of Zizi Traders for May 2023:
debtors' list on 31 May 2023 creditors’ list on 31 May 2023
S. Smith (Dr) R 380 Pronto Distributors (Cr) R1 250
Pronto Distributors (Dr) R4 200 Corke Traders (Cr) R3 400
B. Bouwer (Dr) R1 200 Daniels Ltd. (Dr) R 300
Corke Traders (Cr) R 310 Maseko Manufacturers (Cr) R8 400
Daniels Ltd. (Dr) R1 980
Transactions
1. Transfer the credit balance of Corke Traders in the Debtors' ledger to the Creditors'
Ledger.
2. Transfer the debit balance of Daniels Ltd. in the Creditors' ledger to the Debtors' ledger.
REQUIRED
5.1 Show the entries in the General Journal
5.2 Post to the Debtors ledger
5.3 Post to the Creditors ledger
5.4 Post to the General ledger
ANSWER

94

DEBTORS CONTROL
CREDITORS CONTROL
CORKE TRADERS D1
May 1 Account rendered
DANIELS LTD D2

CORKE TRADERS D1
DANIELS LTD D2

95
ILLUSTRATIVE ACTIVITY: CORRECTION OF ERROR
Transaction:
Repairs to the buildings of R3 000 has been debited to the Land and Buildings account in error.
Explanation
Make use of T-accounts.
STEP 1 Start with the incorrect entry
Dr Bank Account Cr Dr Land and Buildings Cr

Land and Buildings 3 000 Bank Account 3 000
STEP 2 Credit entry to cancel the amount recorded in the land and buildings on the credit side
Dr Land and Buildings Cr Dr Repairs Cr

Bank Account 3 000 Repairs 3 000 Land and Buildings 3 000
Repairs will be debited
NOTE: Bank account will not be changed, the correct amount is recorded on the debit side.
GENERAL JOURNAL
DEBIT CREDIT
Repairs 3 000
Land and Buildings 3 000
Corrected the wrong entry.

96
ACTIVITY 3
INFORMATION
The following information appeared in the books of Zizi Traders.
Transactions: July 2023
07 ABC Bank transferred R11 000 for an interest on fixed deposit and fixed deposit of R10 000
that matured on 30 June 2023. The full amount was credited to the Fixed Deposit account.
Correct the error.
14 Merchandise sold earlier to G. Gorman for R300 has been posted to the account of
G Gustav. Correct the error.
23 Stationary bought on credit from SJ Distributors for R1 400 was correctly recorded in the
Journal. However, with the posting to the General Ledger, it was posted to the packing material
account. Correct the error.
26 The owner took merchandise (cost price R400) for his own use. The amount recorded was
the selling price of R500. Correct the error.
28 Goods bought on credit from Stoney Traders for R3 200 have been recorded correctly in the
journal, but with the posting to the subsidiary ledger, this amount was posted to the account of SJ
Distributors. Correct the error.
REQUIRED
Show the transactions in the General Journal
ANSWER
GENERAL JOURNAL OF ZIZI TRADERS FOR JULY 2023

97
ACTIVITY 4: COMBINED ACTIVITY ON GENERAL JOURNAL TRANSACTIONS

REQUIRED
Enter the following transactions in the General Journal of ABC Traders for May 2023.
Show the narrations.
INFORMATION
1 Charge J Thom, a debtor, with 8% interest per annum on his overdue account of
R9 200, for 3 months.
2 King Suppliers, a creditor, charged ABC Traders with 10% interest per annum for
4 months on their overdue account of R8 400.
3 The owner took goods with a selling price of R600 for his own use. The business
uses a 50% mark-up on cost price.
4 Donate stationery to the amount of R450 to a local crèche.
5 J Archer was declared insolvent. His outstanding balance was R2 000.
ABC Traders received a final dividend of 35 cent in the rand. This has been
recorded. Write the balance off as irrecoverable.
6 An amount of R14 400 was received from EER Bank for the following:
Repayment of Fixed Deposit which matured R13 000
Interest R 1 400
However, the full amount was credited against the Fixed Deposit account.
Correct the error.
7 The broken windows of the building were replaced at a cost of R6 500.
The bookkeeper entered this amount into the Land and Buildings account in
error. Correct the error.
8 Goods bought on credit from XY Suppliers for R870 had been entered by mistake
into the account of XY Wholesalers. Correct the error.
9 A creditor, Mann Transport, charged the overdue account of the business
with R400 interest. The bookkeeper entered this in the books on the issue
of a journal voucher.
10 Goods sold on credit for R140 as per Invoice 445 to L Lion was charged to the account of L
Lyon.
11 Goods returned to AB Traders and recorded in the CAJ for R400 was incorrectly
debited against the account of AB Wholesalers.
12 The total of the Wages column in the CPJ for R2 500 was incorrectly posted to the
Salaries account.
13 The cost of delivering goods to ABC Traders was recorded in the delivery charges
account, R 280.
14 An EFT transfer for R800 was a payment for tyres for the delivery van. The amount was
posted to the Vehicles account.

98
ANSWER SHEET
GENERAL JOURNAL OF ABC TRADERS
Debtors Creditors
Day Details fol Debit Credit control control
Debit Credit Debit credit

99
ACTIVITY 5 : GENERAL LEDGER (30 MARKS )
Thulani’s Pharmacy
You are provided with the Subsidiary journals of Thulani Pharmacy for November 2023.
REQUIRED
5.1 Post to the following accounts in the General Ledger of Thulani Pharmacy:
• Debtors Control (7)
• Trading Stock (17)
• Cost of Sales (6)
INFORMATION
Balances on 1 November 2023:

Debtor Control R 19 000
Trading Stock 95 000
Cost of Sales 105 000
Totals from journals on 30 November 2023
A. Cash Receipts Journal

Bank Sales Cost of Sales Discount Debtors’
Allowed Control
92 200 87 000 43 500 700 5 700
B. Cash Payments Journal

Bank Trading Discount Creditors’ Wages
Stock Received Control
58 100 ? 1 800 23 800 25 100
C. Debtors’ Journal
Sales Cost of Sales
8 200 4 100

100
D. Debtors’ Allowances Journal

Debtors’ Allowances Cost of Sales
1 370 685
E. Creditors’ Journal
Creditors control Trading Stock Equipment Stationery Sundries
25 560 17 460 7 570 530 400
F. Creditors’ Allowances Journal

Creditors control Trading Stock Equipment Stationery Sundries
15 550 8 980 4 880 1 420 270
G.The following information was recorded in the Petty Cash Journal:
• On 30 November 2023, the business purchased trading stock for R1 000 and delivery
charges on goods purchased amounted to R120.
30 marks

101
ACTIVITY 5: GENERAL LEDGER MARKS: 30
GENERAL LEDGER OF THULANI PHARMACY
BALANCE SHEET ACCOUNTS SECTION
DEBTORS CONTROL
2023
Nov 1 Balance b/d 19 000
TRADING STOCK
2023
Nov 1 Balance b/d 95 000
17
COST OF SALES
2023
Nov 1 b/d 105 000
Total

2024 Accounting Grade 10 Learners Notes Session 1-5

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SECONDARY SCHOOL IMPROVEMENT PROGRAMME

(Page 1 of 101 pages)

SESSION TOPIC PAGE

1 Ethics, Internal Control and GAAP principles 3-10

2 Additional cash transactions and the Petty Cash

3 Credit sales 35-58

5 General Journal 82-101

© Gauteng Department of Education

SESSION 1: ETHICS, INTERNAL CONTROL AND GAAP

HOW DOES CODE OF ETHICS BENEFIT THE BUSINESSES?

© Gauteng Department of Education

BASIC PRINCIPLES OF ETHICS

Discipline All members of an organisation need to behave with restraint

Transparency If your actions are always ethical then there should be no

Accountability This means that in all situations the members of the

Sustainability The resources used by the businesses in the daily running of

© Gauteng Department of Education

© Gauteng Department of Education

WHAT IS INTERNAL CONTROL?

WHAT IS THE PURPOSE OF INTERNAL CONTROL?

Purpose of Controls Examples

© Gauteng Department of Education

The following security measures could be put in place:

 Large amounts of cash must be transported by a security company.

© Gauteng Department of Education

Why are GAAP principles or concepts important for financial reporting?

Historical Cost Principle

© Gauteng Department of Education

Examples of year-end adjustments Principle Applied

Interest on overdraft is shown as a separate amount in the Matching

When a debtor settles an account, the discount allowed must be Prudence

Examples of year-end adjustments Principle Applied

The owner of the business won R25 000 in a competition and

Interest on overdraft is shown as a separate amount in the

Trading stock is shown in the Balance sheet at R90 0000, even

When a debtor settles an account, the discount allowed must be

© Gauteng Department of Education

INTERNAL CONTROL AND APPLICATION OF GAAP PRINCIPLES

Sandy provides all the services to customers for cash only.

Answer the questions provided below

© Gauteng Department of Education

SESSION 2: ADDITIONAL CASH TRANSACTIONS AND PETTY CASH JOURNAL

BASIC ACCOUNTING CONCEPTS

© Gauteng Department of Education

Non-Current Assets Current Assets

Debtors People who buy goods on

Non-Current Liabilities Current Liabilities

© Gauteng Department of Education

© Gauteng Department of Education

ASSETS OWNERS’ EQUITY LIABILITIES

NON- CURRENT ASSETS A. Capital Credit balance NON- CURRENT LIABILITIES

Credit-when they decrease Debit-when they decrease

© Gauteng Department of Education

SUMMARY OF ADDITIONAL CASH TRANSACTIONS

© Gauteng Department of Education

© Gauteng Department of Education

General Ledger Effect on Accounting Equation

Carriage on sales is delivery costs

© Gauteng Department of Education

1.1 CASH JOURNALS

Note: The opening balance is recorded in the answer book.

TRANSACTIONS FOR MARCH 2023

© Gauteng Department of Education

© Gauteng Department of Education