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EMS Term 3 - LESSON 4

Financial literacy: CREDITORS
 Term 3

Lesson 1 & 2 - CREDITORS (CONCEPTS, CREDIT

Financial literacy term 3 TRANSACTIONS, SOURCE
DOCUMENTS & JOURNALS)
Lesson 3 & 4 - CREDITORS (GENERAL
LEDGER, CREDITOR ledger)
REVISION: Source documents and Journals used to record credit transactions

Creditors

Source Journals Type of transaction

documents

Original invoice Creditors Journal Credit purchases

EFT Reference number Cash Payments Journal Payments to creditors

WHAT IS A CREDITORS LEDGER AND WHAT IS ITS PURPOSE?

● a Creditors Ledger is a subsidiary ledger where the accounts of various

creditors are combined.
● Each creditor receives a unique number and all the details of each
transaction with the creditor are recorded in it.
● Transactions are posted daily to the accounts so that each day a specific
account shows the precise amount (balance) due to the creditor.
 The format of the Creditors Ledger
Creditors Ledger of Binneland Traders 1

T Jonker 2 3 C1

Date 4 Details 5 6 Fol 7 Debit - 8 Credit + 9 Balance

· 6 Folio reference from

8 The account·is
· 4 The date of the · 5 Details of the 9 The running total or balance
where the transaction credited
transaction transaction of the account; each time a
was posted because a
liability transaction is entered, it is
· 2 Then the name of the Creditor and his folio number or increases either added (for credit) or
1 You start with ledger account number unique to the creditor is C1 3 · 7 The account is
subtracted (for debit) from the
the business debited because a previous line’s balance.
name liability decreases
EXAMPLE:
Post the following Journals to the Creditors Ledger of IKASI KOFU COMPANY. On 1 June 2021, the
balance of O’Conner Wholesalers was R8 250.
EXAMPLE: Post the following Journals to the Creditors Ledger of IKASI KOFU COMPANY. On 1
June 2021, the balance of O’Conner Wholesalers was R8 250.
SUMMARY OF CREDITORS LEDGER ENTRIES:
Information Details/Source Column Balance column
from: document

CJ Invoice Credit Add to the balance

CPJ EFT reference number Debit Subtract from the

balance
Click on the image to access the
self-marking assessment for
lesson 4

Slides created by Mrs. J Louw

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