Module 3: Cash Journals, Posting to the General Ledger, and Completion of a Trial Balance

Cash Journals

CRJ (Cash Receipts Journal)

Date Details Folio Analysis of Receipts Bank Sales Sundry Accounts Amount
01/05 Cash Sales Cash Sales 500 500 500
02/05 Received from Debtor Debtor 300 Debtors Control 300
03/05 Loan Loan Received 1000 Loan Account 1000

CPJ (Cash Payments Journal)

Date Details Folio Analysis of Payments Bank Creditors Sundry Accounts Amount
01/05 Paid Supplier A Payment to Creditors 200 200 200
02/05 Rent Expense 500 Rent Expense 500
03/05 Purchase Stock Trading Stock 300 Trading Stock 300

General Ledger

Trading Stock Account

Date Details Folio Debit Credit Balance
01/05 Balance b/d 1000 1000
03/05 Purchase Stock CPJ 300 1300
10/05 Cost of Sales GJ 400 900

Bank Account

Date Details Folio Debit Credit Balance
01/05 Balance b/d 5000 5000
02/05 Receipts CRJ 1800 6800
03/05 Payments CPJ 1000 5800
04/05 Bank Charges GJ 50 5750

Posting to the General Ledger

Ensure each transaction is posted to both debit and credit accounts as per double-entry bookkeeping.

Completion of a Trial Balance

Account Name Debit Credit
Bank 5750
Trading Stock 900
Sales 500
Debtors Control 300
Creditors Control 200
Rent Expense 500
Loan Account 1000
Total 7450 1700

Module 4: Credit Sales and Receipts from Debtors

Credit Transactions

Involves selling goods or services to customers with an agreement to receive payment in the future. Key documents include the invoice and statement of account.

Different Ways for Customers to Buy on Credit

Customers can buy on credit through various methods such as open accounts, installment sales, credit cards, and store credit.

The National Credit Act (NCA)

The National Credit Act aims to promote a fair and non-discriminatory credit market. Key provisions include regulation of credit information, prevention of reckless lending, and consumer rights protection.

The Consumer Protection Act (CPA)

The Consumer Protection Act promotes fair, accessible, and sustainable marketplace for consumer products and services. Key provisions include the right to fair and honest dealing, protection against unfair business practices, and the right to fair value and good quality.

Effect of Credit Sales on the Accounting Equation

Credit sales increase accounts receivable (asset) and increase sales revenue (equity).

The Invoice

The invoice is a document issued by a seller to a buyer indicating quantities, prices, and terms of sale. It includes details such as the invoice number, date, seller and buyer details, description of goods/services, quantity, unit price, and total amount due.

Debtors Journal & Debtors Allowances Journal

The Debtors Journal records all sales made on credit, while the Debtors Allowances Journal records returns and allowances granted to customers on credit sales.