SUBJECT: GRADE: DATE: WEEK: CAPS SECTION:

EMS 7 8 9 Term 4: Lesson 1 Term 4 Week 1 Financial Literacy

Learners must be able to:
AIMS OF LESSON: 1. Do and understand credit transactions: creditors

DIGITAL RESOURCES:
PAPER BASED RESOURCES:
 https://www.thelearningtrust.org/asp-treasure-box
RESOURCES  Textbooks
 wcedeportal.co.za

Prior content knowledge: Debtors

Link with the next lesson: Cash and Credit
By the end of the lesson learners will be able to:
INTRODUCTION
 Do the effect of the transactions on the accounting equation
 Do the CJ and the CPJ
 To post the journals to General Ledger and Creditors Ledger
Any terms that appear in the topic that do not form part of the learner's normal vocabulary.
 Creditors
 Original invoice
TERMINOLOGY  Trade discount

What is a creditor?

When the business purchases goods or services on credit, the person/business from whom we purchased is known as the
CONTENT: creditor.
CONCEPTS and/or
SKILLS CREDIT TRANSACTIONS: CREDITORS:
Analyse the transactions according to the answer sheets.
TRANSACTIONS:
1. Received invoice from Eggie Traders for goods, R6 000 less 10 % trade discount.
2. Sent cheque for R689 to Veggie Pty Ltd in settlement of amount owed to them.

ASSETS OWNERS’ EQUITY LIABILITIES

Effect Reason Effect Reason Effect Reason

No Source document Journal Account debit Account credit Amount

1.
2.

CALCULATION OF TRADE DISCOUNT:

1. R6 000 – 10 % = R5 400

OR

R6 000 X 90 % = R5 400
 ASSETS OWNERS’ EQUITY LIABILITIES

Effect Reason Effect Reason Effect Reason

1 + 5 400 Trading stock +5 400 Creditors increases

increases

2 - 689 Cash decreases - 689 Creditors decreases

No Source document Journal Account debit Account credit Amount

1. Original invoice CJ Trading stock Creditors control 5 400
2. Cheque counterfoil CPJ Creditors control Bank 689

Source documents and Journals used to record credit transactions

Creditors
Source documents Journals Type of transaction
Original invoice Creditors Journal Credit purchases

Cheque counterfoil Cash Payments Journal Payments made to creditors

 Activity 1:

The following information was extracted from the accounting records of Eksteen Wholesalers who buys on credit.

Instruction

1. Record the following transactions in the Creditors and Cash Payments Journals. Close off the journals at the end of
the month.

2. Post to the following accounts in the General Ledger. Balance/total the accounts at the end of the month.
 Trading stock
 Creditors control
 Consumable stores

3. Post to the Creditors Ledger.

CONSOLIDATION
Information
ACTIVITY/EXAMPL
E
Creditors List on 1 June 2019:
O’Connor Wholesalers R8 250
Ntuli Traders R4 500

Balances/totals on 1 June 2019

Creditors Control R12 750
Trading Stock R 7 680
Consumable Stores R 1 255

Transactions for June 2019

3 Purchased Trading stock, R2 400 on credit from O’ Connor Wholesalers. Received

invoice A533 (renumbered 001).

6 Bought consumable stores, R320 and trading stock, R2 120 from O’ Connor Wholesalers.
Received a 10% cash discount, as the amount was paid by cheque no. 345.
8 Received invoice 908 from Ntuli Traders for consumable stores, R470.

10 Cashed a cheque to pay wages, R8 200.

18 Paid O’Connor Wholesalers, R2 900 by cheque as part payment on their account.

19 Issued a cheque to Ntuli Traders to settle the amount owing to date.

22 Purchased a new cash register on credit from O’ Connor Wholesalers for R6 510 subject
to a trade discount of 33⅓ %.

27 Bought the following on credit from Ntuli Traders:

equipment, R1 200
consumable stores, R800.

30 Paid electricity by cheque to Eskom, R650.

Creditors Journal of Eksteen Wholesalers – June 2019 CJ2

Creditors Trading Consumable Sundry accounts
Doc no D Details Fol
control stock stores Amount Fol Details
Cash Payments Journal of Eksteen Wholesalers – June 2019 CPJ2
Trading Consumable Creditors Sundry accounts
Doc no D Details Fol Bank
stock stores control Amount Fol Details

Dr General Ledger of Eksteen Wholesalers Cr

Balance Sheet Accounts section

Trading stock B4

Date Details Fol Amount Date Details Fol Amount

 Creditors control B5

Nominal Accounts Section

Consumable stores N6
 Creditors ledger of Eksteen Wholesalers
O'Connor s C1

Date Details Fol Debit Credit Balance

Ntuli Traders C2

Date Details Fol Debit Credit Balance

 List (schedule) of balances of creditors on 30 June 2019
O’ Connor Groothandelaars C1
Ntuli Handelaars C2
Creditors control B5

Memorandum: Activity 1

Creditors Journal of Eksteen Wholesalers – June 2019 CJ2

Creditors Trading Consumable Sundry accounts
Doc no D Details Fol
control stock stores Amount Fol Details
O’Conner
MEMORANDUM 001 3 Wholesalers C1 2 400 2 400
OF ACTIVITIES 002 8 Ntuli Traders C2 470 470
O’Conner
003 22 Wholesalers C1 4 340 4 340 Equipment
004 27 Ntuli Traders C2 2 000 800 1 200 Equipment
9 210 2 400 1 270 5 540
B5 B4 N6
Cash Payments Journal of Eksteen Wholesalers – June 2019 CPJ2
Trading Consumable Creditors Sundry accounts
Doc no D Details Fol Bank
stock stores control Amount Fol Details
O’Conner
345 6 Wholes 2 196 1908 288
346 10 Cash 8 200 8 200 Wages
O’Conner
347 18 Wholes C1 2 900 2 900
348 19 Ntuli Traders C2 4 970 4 970
Water &
349 30 Eskom 650 650 electricity
18 916 1 908 288 7 870
B4 N6 B5

Dr General Ledger of Eksteen Wholesalers Cr

Balance Sheet Accounts section

Trading stock B4

Date Details Fol Amount Date Details Fol Amount

2019
Jun 1 Balance b/d 7 680

30 Bank CPJ2 1 908

Creditors
control CJ2 2 400

11 988
 Creditors control B5

2019 2019
Jun 30 Jun
Bank CPJ2 7 870 1 Balance b/d 12 750

Sundry
Balance c/d 14 090 30 purchases KJ2 9 210

21 960 21 960

Jul 1 Balance b/d 14 090

Nominal Accounts Section

Consumable stores N6

2019
Jun 1 Balance b/d 1 255

30 Bank CPJ2 288

Creditors
control CJ2 1 270

2 813
 Creditors ledger of Eksteen Wholesalers
O'Connor s C1

Date Details Fol Debit Credit Balance

2019
Jun 1 Account rendered 8 250

3 Invoice 001 CJ2 2 400 10 650

18 Cheque counterfoil 347 CPJ2 2 900 7 750

22 Invoice 003 CJ2 4 340 12 090

Ntuli Traders C2

Date Details Fol Debit Credit Balance

2019
Jun 1 Account rendered 4 500

8 Invoicer 002 CJ2 470 4 970

19 Cheque counterfoil 348 CPJ2 4 970 -

27 Invoice 004 CJ2 2 000 2 000

List (schedule) of balances of creditors on 30 June 2019

O’ Connor Groothandelaars C1 12 090

Ntuli Handelaars C2 2 000
Creditors control B5 14 090