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Journals and Debtors control

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1 Journals and Debtors control
FAC1502 Journals and Debtors control Journals and Debtors control You as an accountant of A-Z Bookseller need to receive a source document like an invoice from a student that just bought his prescribed book before you can take action. It could only be a cash or a credit transaction.

2 Journals Sales Journal - Jan 20.2 Invoice Date Details Fol Sales
VAT Output Debtors R 245774 30 SA Meshesha 750.00 105.00 855.00 Record the transaction in one of the seven Journals. If it is on credit record the transaction in the sales journal because A-Z Bookseller is selling prescribed books. Because of the large number of transactions like students buying books at A-Z Bookseller, it is not practical to record each transaction directly in the ledger (this makes the ledger very bulky and unmanageable). Transactions of the same type are grouped together in summarised form in the ledger. A journal is thus a link between source documents and the ledger.

3 Journals Ledger accounts Sales Journal - Jan 20.2 SA Meshesha Invoice
Date Details Fol Sales VAT Output Debtors R 245774 30 SA Meshesha 750.00 105.00 855.00 Ledger accounts Now the debtor’s accounts are debited individually in the debtors ledger with sales. SA Meshesha Date Invoice Details R Detail 2 245774 Sales (Prescribed Book) 855.00

4 Journals Sales Journal - May 20.2 Sales Returns Journal - May 20.2
Exercise Journals Sales Journal - May 20.2 Date Details Fol Sales VAT Output Debtors R 2 A DL1 200.00 20.00 220.00 B DL2 400.00 40.00 440.00 C DL3 100.00 10.00 110.00 700.00 70.00 770.00 GL 5 Sales Returns Journal - May 20.2 After one month the Journals and the Ledger accounts will have all the transactions in it for that month. The sales Journal and the Sales returns Journal. Date Details Fol Sales VAT Output Debtors R 8 B DL2 40.00 4.00 44.00 C DL3 20.00 2.00 22.00 60.00 6.00 66.00 GL 5

5 SettlementDiscount granted
Exercise Journals Cash Receipts Journal - May 20.2 Date Details Fol Bank Debtors SettlementDiscount granted VAT Input R 15 A DL1 600.00 670.00 64.00 *6.00 B DL2 400.00 C DL3 500.00 522.00 20.00 2.00 84.00 8.00 GL 5 The cash receipts journal. * Approximation

6 Journals General Journal - May 20.2 Exercise Date Details Fol Total
Debtors control Creditors control Debit Credit Dr Cr 15 C Furniture VAT Output Sold furniture on credit to C DL3 803.00 730.00 73.00 18 VAT Input Received furniture back from C 230.00 23.00 253.00 GL 3 The general journal. Let’s work through this exercise to explain it properly.

7 Exercise Journals Required: 1 Prepare the debtors control account in the general ledger. 2 Prepare the ledger accounts of the three debtors in the debtors ledger. * List of opening balances of debtors: A R450.00 B R680.00 C R220.00 R 1. Prepare the debtors control account in the general ledger. 2. Prepare the ledger accounts of the three debtors in the debtors ledger. List of opening balances of debtors: A R450.00 B R680.00 C R220.00

8 Journals Sales Journal - May 20.2 Sales Returns Journal - May 20.2
Exercise Journals Sales Journal - May 20.2 Date Details Fol Sales VAT Output Debtors R 2 A DL1 200.00 20.00 220.00 B DL2 400.00 40.00 440.00 C DL3 100.00 10.00 110.00 700.00 70.00 770.00 GL 5 Sales Returns Journal - May 20.2 Posting to ledger accounts for control purposes happens at the end of the month and only the total credit sales for the month are credited to the sales account and the total debtors debited to the debtors control account. The total of the debtors in the Sales Journal of R and the total of the debtors in the Sales returns Journal of R66.00 Date Details Fol Sales VAT Output Debtors R 8 B DL2 40.00 4.00 44.00 C DL3 20.00 2.00 22.00 60.00 6.00 66.00 GL 5

9 Journals Ledger accounts Dr Debtors control GL 5 Cr Solution Date
Detail Fol R May 1 Balance * b/d May 31 Sales returns SRJ1 66.00 31 Sales SJ1 770.00 Bank and discount CRJ1 Sundry journal debits J1 803.00 credits 253.00 Balance c/d Jun 1 Balance ** Must be booked to Debtors control, Sales as a debit of R and Sales returns as a credit of R66.00.

10 SettlementDiscount granted
Exercise Journals Cash Receipts Journal - May 20.2 Date Details Fol Bank Debtors SettlementDiscount granted VAT Input R 15 A DL1 600.00 670.00 64.00 *6.00 B DL2 400.00 C DL3 500.00 522.00 20.00 2.00 84.00 8.00 GL 5 The total of the debtors in the Cash receipts Journal of R * Approximation

11 Journals Ledger accounts Dr Debtors control GL 5 Cr Solution Date
Detail Fol R May 1 Balance * b/d May 31 Sales returns SRJ1 66.00 31 Sales SJ1 770.00 Bank and discount CRJ1 Sundry journal debits J1 803.00 credits 253.00 Balance c/d Jun 1 Balance ** Must be booked to Debtors control, bank and discount as a credit of R

12 Journals General Journal - May 20.2 Exercise Date Details Fol Total
Debtors control Creditors control Debit Credit Dr Cr 15 C Furniture VAT Output Sold furniture on credit to C DL3 803.00 730.00 73.00 18 VAT Input Received furniture back from C 230.00 23.00 253.00 GL 3 In the general Journal, book the debit of R and the credit of R253.00

13 Journals Ledger accounts Dr Debtors control GL 5 Cr Solution Date
Detail Fol R May 1 Balance * b/d May 31 Sales returns SRJ1 66.00 31 Sales SJ1 770.00 Bank and discount CRJ1 Sundry journal debits J1 803.00 credits 253.00 Balance c/d Jun 1 Balance ** To the Debtors control.

14 Journals Ledger accounts Dr Debtors control GL 5 Cr Solution Date
Detail Fol R May 1 Balance * b/d May 31 Sales returns SRJ1 66.00 31 Sales SJ1 770.00 Bank and discount CRJ1 Sundry journal debits J1 803.00 credits 253.00 Balance c/d Jun 1 Balance ** Calculate the closing balance of R

15 Journals Debtors Ledger accounts Dr A DL1 Cr Dr B DL2 Cr Solution Date
Detail Fol R May 1 Balance * b/d 450.00 May 15 Bank and discount CRJ1 670.00 2 Sales SJ1 220.00 Dr B DL2 Cr Thus the total of all the balances of the individual debtors must equal the balance of the debtors account in the general ledger and this is an effective control of your accuracy. Debtor A paid everything and Debtor B’s outstanding balance is R676.00 Date Detail Fol R May 1 Balance * b/d 680.00 May 8 Sales returns SRJ1 44.00 2 Sales SJ1 440.00 15 Bank CRJ1 400.00 31 Balance c/d 676.00 Jun 1 Balance **

16 Journals Debtors Ledger accounts Dr C DL3 Cr Solution
Date Detail Fol R May 1 Balance * b/d 220.00 May 8 Sales returns SRJ1 22.00 2 Sales SJ1 110.00 15 Bank and discount CRJ1 522.00 18 Furniture J1 253.00 31 Balance c/d 336.00 Jun 1 Balance ** Plus Debtor C’s outstanding balance of R * List of closing balances of debtors: A R - B R676.00 C R336.00 R

17 Journals Debtors Ledger accounts Dr C DL3 Cr Solution
Date Detail Fol R May 1 Balance * b/d 220.00 May 8 Sales returns SRJ1 22.00 2 Sales SJ1 110.00 15 Bank and discount CRJ1 522.00 18 Furniture J1 253.00 31 Balance c/d 336.00 Jun 1 Balance ** Total to R * List of closing balances of debtors: A R - B R676.00 C R336.00 R

18 Journals Ledger accounts Dr Debtors control GL 5 Cr Solution Date
Detail Fol R May 1 Balance * b/d May 31 Sales returns SRJ1 66.00 31 Sales SJ1 770.00 Bank and discount CRJ1 Sundry journal debits J1 803.00 credits 253.00 Balance c/d Jun 1 Balance ** And this equals the balance of the Debtors control of R This means the Debtors are accurate in the books.

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