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FAC1501– Lecture 4

SUBSIDIARY JOURNALS
Journals are known as books of first entry. All transactions are recorded in the journals
before being posted to the general ledger.

Type of transactions and examples of source documents used in subsidiary journals:

Cash Receipts Journal All cash received Cash Register Roll (Till Slip) /

Receipts / Cash Invoice

Cash Payments Journal All cash payments made Cheque Counterfoil /Debit Notes/

Bank Statement

Purchases Journal All credit purchases of Inventory Supplier’s Invoice

Purchase Returns Journal Returns of Inventory to Supplier (Debit Note) / Supplier’s Credit Note

Sales Journal All credit sales of Inventory Sales Invoice

Sales Returns Journal Returns of Inventory by customer Credit Note

Petty Cash Journal All small cash payments Petty Cash Voucher

General Journal All other transactions Voucher

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ACTIVITY 1
The following information was taken from the books of Fanfare Stores for March 2020.
REQUIRED:

Indicate in each of the following transactions listed below, the subsidiary journal to be used.
NO TRANSACTION JOURNAL

1 The owner, F Furious deposited R125 000 in the banking account of the business
as his capital contribution.
2 Paid Cader Suppliers via internet banking for the purchases of goods, R8 400.

3 Paid Escom R2 500 for the electricity deposit for the month.

4 Cash sales of merchandise, R8 500.

5 Sold merchandise on credit to P Williams R1 100.

6 Bought merchandise on credit from Willow Traders, R15 300.

7 Draw cash to pay wages R550

8 Returned damaged merchandise to Willow Traders, R1 200.

9 Bought equipment on credit from SJ Suppliers, R3 600.

10 P Williams returned goods, incorrectly supplied to him, R150

11 Paid Telkom to pay the telephone account, R880.

12 Sold merchandise on credit to A Bird, R2 500

13 Bought stationery on credit from Waltons, R800.

14 Paid SJ Suppliers on account, R2 000.

15 Bought merchandise on credit from SS Stores, R7 500.

16 A Bird returned damaged merchandise, R200.

17 Paid PP Suppliers via EFT for the purchases of equipment, R9 750

18 Returned incorrect merchandise to SS Stores, R400.

19 P Williams paid R450 on account.

20 The owner took a cash cheque for private use.

21 Received R750 from a tenant, Rose Florists.

22 Bought office chairs and tables on credit from Furniture Ltd. R2 300.

23 Paid Willow Traders on account, R4 000.

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EXERCISEONE – journals, general ledger and trial balance.

(Retail Undertaking – Periodic Inventory System – No VAT)

The following information relates to Standerton Traders :

STANDERTON TRADERS
TRIAL BALANCE AS AT 31 OCTOBER 2019
Capital 50 760
Equipment 6 200
Bank 17 000
Inventory: Merchandise 28 072
Trade Receivables Control 13900
Trade Payables Control 31 700
Sales 54 500
Settlement Discount Received 3 600
Purchases 32 828
Settlement Discount Granted 1 440
Carriage on Purchases 3 360
Carriage on Sales 4 560
Rent Expense 12 000
Wages 21200
R140 560 R140 560

Debtors’ List: Creditors’ List:

M Meyer 4 500 ABC Suppliers 12 500
N Nathan 2 800 XX Traders 18 000
NNel 6 600 Office Suppliers 1 200
13 900 R31 700

The following transactions took place in November 2019:

1 Paid the monthly rent to Add Agencies, R2 000.
2 M Meyer paid R4250, in full settlement of his account.
3 Paid ABC Suppliers R11 750 in full settlement of the amount owed.
5 Paid Spoornet R650 for railage on goods received from ABC Suppliers.
6 Cash sales of merchandise , R6 400.
Paid XX Couriers R210 for freight on goods delivered to N Nathan. Standerton
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Traders bears the cost of the delivery.
12 Received R2 500 on account from N Nel.
17 Paid the amount due to Office Suppliers, less 5% discount
23 Cash sales of merchandise , R3 400.
25 Paid cash for goods purchased from Ackermans R2 900.
30 Issued a cheque for wages , R2 500.

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REQUIRED

1. Open all the accounts in the General Ledger.

2. Record the transactions for November 2019 into the relevant subsidiary journals:

CRJ – Bank, Sales, Trade Receivables, SDG and Sundries

CPJ – Bank, Purchases, Trade payables, SDR and Sundries

3. Post the entries from the subsidiary journals to the accounts opened in the General
Ledger

4. Complete the Trial Balance as at 30 November 2019

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CASH RECEIPTS JOURNAL FOR NOVEMBER 2019

Details Bank Sales Trade Receivables SDG Sundries Details

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CASH PAYMENTS JOURNAL FOR NOVEMBER 2019

Trade
Details Bank Purchases SDR Sundries Details
payables

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GENERAL LEDGER
CAPITAL EQUIPMENT

BANK INVENTORY

TRADE RECEIVABLES CONTROL TRADE PAYABLES CONTROL

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SALES PURCHASES

SETTLEMENT DISCOUNT RECEIVED SETTLEMENT DISCOUNT GRANTED

CARRIAGE ON PURCHASES CARRIAGE ON SALES

RENT EXPENSE WAGES

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STANDERTON TRADERS

TRIAL BALANCE AS AT 30 NOVEMBER 2019

DEBIT CREDIT

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