Accounting - Term 2 - Week 3

Imagine Thandi runs a spaza shop in Khayelitsha. Every time she sells airtime or bread, she gives a receipt. These receipts are source documents—proof that a transaction happened. Without them, Thandi could forget sales or make mistakes in her records. In accounting, source documents like receipts, invoices, and cash slips are the first step in the accounting cycle. They show the date, amount, parties involved, and nature of the transaction. For example, a minibus taxi owner in Soweto uses a cash receipt book to track daily fares. The rule: every transaction must have a source document before it can be recorded. Some learners think you can record transactions from memory or WhatsApp messages—this is incorrect. Only official documents count. Always check for the document before making an entry.

Picture Ahmed, who owns a stationery shop in Polokwane. He receives a duplicate cash invoice when a school buys calculators. Later, he gets a bank deposit slip for the payment. Each document has a purpose. Cash receipts (like till slips) go into the Cash Receipts Journal (CRJ). Cash payments (like cheques or EFT slips) go into the Cash Payments Journal (CPJ). Credit sales use duplicate invoices, recorded in the Debtors Journal (DJ). Credit purchases use original invoices, recorded in the Creditors Journal (CJ). A common mistake: mixing up which document goes where, especially with credit transactions. Remember: the document type and whether it’s original or duplicate tells you which journal to use. Always double-check the transaction type before recording.

Lerato works at her uncle’s tuckshop in Mthatha. She gets a pile of receipts after a busy Saturday. To record them, she must spot the date, amount, and who paid or received the money. For example, a receipt dated 15 May 2024 for R250 from 'Sipho M.' goes into the CRJ on 15 May, under the correct column. The date tells you when the transaction happened. The amount shows how much money changed hands. The parties (who bought or sold) help you update the right accounts. Many learners miss the party’s name or use the wrong date, leading to lost marks in exams. Always circle or highlight these three details before recording.

During load-shedding, Ahmed’s shop gets busy and he rushes his paperwork. He sometimes enters the wrong amount or skips a receipt. In NSC exams, markers penalise missing or incorrect entries. One misconception is that small errors don’t matter—they do! Even a R10 difference can cause your trial balance not to balance. To avoid mistakes, always check the document twice, enter details immediately, and use a ruler to keep your place in the journal. If you’re unsure which journal to use, ask: Was it cash or credit? Did money come in or go out? This habit saves marks and keeps your records reliable.

Step 1: Thandi sells cold drinks for R120 cash on 3 June 2024 and issues receipt 0051. Step 2: Identify the source document—receipt 0051, which is proof of the cash sale. Step 3: Extract the date (3 June 2024), amount (R120), and party (customer, cash sale) from the receipt. Step 4: Enter in the CRJ: Date—3 June; Details—Cash Sale; Doc. No.—0051; Amount—R120. Step 5: Check that the receipt matches the cash received and that the date is correct. Final answer: The transaction is correctly recorded in the CRJ. Sanity check: The cash on hand should increase by R120, matching the cash in the till and the receipt.

Step 1: Ahmed buys printer paper on credit from OfficePro for R350 on 10 June 2024, invoice 102. Step 2: Identify the source document—original invoice 102, which is proof of the credit purchase. Step 3: Extract the date (10 June 2024), amount (R350), and party (OfficePro, creditor) from the invoice. Step 4: Enter in the CJ: Date—10 June; Details—OfficePro; Doc. No.—102; Amount—R350. Step 5: Confirm it’s a credit purchase, so it belongs in the CJ, not the CPJ. Final answer: The transaction is correctly recorded in the Creditors Journal. Sanity check: The amount owed to OfficePro increases by R350, and the invoice matches the entry.

Question: Sipho pays R80 cash for pens at a local store on 12 June 2024, receipt 210. Let’s think: Is this cash in or out? It’s cash out, so it must be recorded as a payment. Which journal? CPJ, because it’s a cash payment. Model: Date—12 June; Details—Pens; Doc. No.—210; Amount—R80. Now you try: On 14 June, Lerato pays R50 cash for bread, receipt 211. Where and how do you record it? Remember to check if it’s cash in or out, and choose the correct journal. Answer: CPJ, Date—14 June; Details—Bread; Doc. No.—211; Amount—R50. Always double-check the document and details before recording.

Question: Ahmed sells R200 worth of books on credit to Zanele on 15 June 2024, invoice 205. Think: Is this cash or credit? It’s credit, so payment will come later. Which journal? DJ, because it’s a credit sale. Model: Date—15 June; Details—Zanele; Doc. No.—205; Amount—R200. Your turn: On 16 June, Thandi sells R150 worth of chips on credit to Musa, invoice 206. Where and how do you record it? Make sure to identify the type of sale and the correct journal. Answer: DJ, Date—16 June; Details—Musa; Doc. No.—206; Amount—R150. Double-check that it’s a credit sale and the invoice is the correct document.

1. List three types of source documents used in South African businesses, such as receipts, invoices, and deposit slips. 2. State which journal records cash received and explain why it is used for this purpose, giving an example from a local business. 3. Identify the key details to extract from a receipt and describe why each is important for accurate records, such as ensuring the correct date, amount, and party are recorded to avoid mistakes.

1. Record a cash payment of R60 for taxi fare on 18 June 2024, receipt 301. Write the full journal entry, including date, details, document number, and amount, and explain your reasoning. 2. Record a credit purchase of R400 from Durban Supplies, invoice 501, on 19 June 2024. Include all necessary details for the Creditors Journal and explain why this is the correct journal. 3. Explain why you cannot record a transaction without a source document, and give an example of what could go wrong if you do, such as recording a sale that never happened.

1. Analyse why recording the wrong date in a journal can cause problems at month-end, especially when preparing financial statements, and give an example of the impact. 2. Justify which journal to use for a duplicate invoice for a credit sale, and explain your reasoning using a real-life business scenario. 3. Solve: Thandi receives R500 cash from a customer on 20 June 2024, receipt 100. She forgets to record it. What is the impact on her cash records and trial balance? Explain your answer in detail, considering both the immediate and long-term effects.

• Original invoice
• Duplicate receipt
• Bank statement
• Credit note

Answer: Duplicate receipt

A duplicate receipt is proof of cash received and is entered in the CRJ. Many confuse this with invoices, which are for credit transactions.

• Cash Receipts Journal
• Debtors Journal
• Creditors Journal
• Petty Cash Journal

Answer: Creditors Journal

Credit purchases are recorded in the Creditors Journal. Some mix this up with the Debtors Journal, which is for credit sales.

• To decorate files
• To provide proof of a transaction
• To calculate profit
• To pay salaries

Answer: To provide proof of a transaction

Source documents prove that a transaction occurred. They are not for decoration or direct profit calculation.

• Date
• Amount
• Party involved
• Colour of ink

Answer: Colour of ink

Date, amount, and party are essential. The ink's colour does not affect the transaction record.

• CRJ
• CPJ
• DJ
• CJ

Answer: CPJ

Cash payments, like for electricity, go in the CPJ. Many learners confuse this with the CRJ, which is for cash received.

Answer: Cash receipt book, bank deposit slip

These are common in cash-based businesses like taxis. Invoices are less common unless credit is offered.