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Imagine Thandi running her tuck shop in Khayelitsha. Every day, she receives cash slips from customers, pays for bread with a supplier’s invoice, and deposits cash at the bank. These papers are not just admin—they are proof of every transaction. Without them, Thandi can’t track her sales, pay her suppliers, or prove her income to SARS. A source document is any paper or digital record that proves a business transaction happened. Examples include cash slips, invoices, receipts, and bank deposit slips. The golden rule: every transaction must have a source document. Many learners think you can record transactions from memory, but in real business, this leads to errors and even fraud. Always use the document as your starting point. In South Africa, keeping these documents is not just good practice—it’s required by law for tax and audit purposes. If you lose them, you might not be able to claim expenses or prove your income.
Sipho’s spaza in Polokwane uses different documents for different deals. When a customer buys airtime with cash, Sipho gives a cash slip. When he buys stock on credit from a wholesaler, he receives an invoice. For every cash deposit, the bank issues a deposit slip. Cash transactions (immediate payment) use cash slips, receipts, and deposit slips. Credit transactions (pay later) use invoices and statements. The key difference: cash documents show money moved now; credit documents show money owed. Don’t mix these up—many learners record credit sales in the cash journal, which is incorrect. Always check if the document says ‘Paid’ or ‘Owing’. Invoices are for credit, while receipts and cash slips are for cash. If you see 'Terms: 30 days', it means the payment will be made later, not immediately.
Lerato in Durban receives a supplier’s invoice for R1 500 of cold drinks, payable in 30 days. She must record this in her Purchases Journal, not the Cash Payments Journal, because no cash left her business yet. The process: 1) Identify the document type, 2) Extract key details (date, amount, parties), 3) Decide which journal to use, 4) Record accurately. For cash received, use the Cash Receipts Journal; for cash paid, use the Cash Payments Journal; for credit purchases, use the Purchases Journal. A common mistake is to record the same transaction in two journals—avoid double-counting by checking the document type and payment status. If you are unsure, ask: Has the money actually moved? If not, it’s probably a credit transaction. Always double-check the document before recording.
Step 1: Thandi sells snacks for R200 cash and gives the customer a cash slip. This is a typical cash transaction in a busy Soweto shop. Step 2: Identify the document as a cash slip (proof of cash received). Step 3: Extract the details: Date: 2 August 2024, Amount: R200, Customer: Local resident. Step 4: Decide the journal—Cash Receipts Journal (CRJ) because cash was received immediately. Step 5: Record: Date: 2 Aug, Details: Snacks, Amount: R200 in CRJ. Final answer: The R200 cash sale appears in the CRJ. Sanity check: Cash increased, so it must go in the CRJ. If you put this in the wrong journal, your cash totals will be wrong at month-end and you could confuse your business records.
Step 1: Sipho buys cooldrinks from a wholesaler on credit for R1 000 and receives an invoice. This is a common way for small businesses to manage cash flow. Step 2: Identify the document as an invoice (proof of credit purchase). Step 3: Extract the details: Date: 3 August 2024, Amount: R1 000, Supplier: Polokwane Wholesalers. Step 4: Decide the journal—Purchases Journal (PJ) because it’s a credit purchase, not a cash payment. Step 5: Record: Date: 3 Aug, Details: Cooldrinks, Amount: R1 000 in PJ. Final answer: The R1 000 credit purchase appears in the PJ. Sanity check: No cash moved yet, so not in the Cash Payments Journal. If you record this in the wrong journal, you might pay your supplier twice or miss the payment entirely.
Question: Ahmed pays R500 cash for taxi fare to deliver bread and receives a receipt. Let’s think: Is this cash or credit? The receipt proves cash was paid immediately, so it’s a cash transaction. Which journal? Cash Payments Journal (CPJ), because money left the business. Model answer: Date: 4 August 2024, Details: Taxi fare, Amount: R500 in CPJ. Now you try: Lerato pays R300 cash for electricity and receives a receipt. Which journal? Answer: CPJ. Remember, always check if the payment was made right away.
Question: Sipho sells groceries on credit to a local school for R2 000 and issues an invoice. Is this cash or credit? The invoice means the school will pay later, so it’s a credit transaction. Which journal? Sales Journal (SJ), because it’s a credit sale. Model answer: Date: 5 August 2024, Details: Groceries to school, Amount: R2 000 in SJ. Now you try: Thandi sells stationery on credit to a neighbour for R400 and issues an invoice. Which journal? Answer: SJ. Always check if the customer paid now or will pay later.
1. List three types of source documents you might find in a Soweto spaza shop, such as cash slips, invoices, and bank deposit slips. 2. State which journal you’d use for a cash sale and explain why. 3. Identify if an invoice is used for cash or credit transactions and justify your answer with an example.
1. Ahmed receives a bank deposit slip for R1 200. Which journal records this and why? 2. Sipho buys stock on credit for R800 and receives an invoice. Record the transaction in the correct journal, including the date and details. 3. Thandi pays R350 cash for airtime and receives a receipt. Record the transaction in the appropriate journal and explain your choice.
1. Lerato receives an invoice for R2 500 for goods bought on credit, then pays the supplier R2 500 cash a week later and receives a receipt. Record both transactions in the correct journals, showing dates and details. 2. Explain why recording a credit purchase in the Cash Payments Journal is incorrect, giving a real-life example. 3. Analyse a sample cash slip and identify the key information needed for recording, such as date, amount, and purpose.
Answer: Cash slip
A cash slip is proof of a cash sale. Many confuse invoices with cash slips, but invoices are for credit transactions.
Answer: Purchases Journal
Credit purchases go in the Purchases Journal. Recording them in a cash journal is a common error.
Answer: Bank deposit slip
A bank deposit slip is proof of money deposited. Receipts are for payments made, not deposits.
Answer: Cash is paid
Receipts are proof of cash payments. Many think receipts are for credit, but they are for immediate payment.
Answer: Cash Receipts Journal
Cash Receipts Journal records all cash inflows. Confusing it with the Cash Payments Journal is a frequent mistake.
Answer: Date and amount
Date and amount are essential for accurate recording. If you forget to record the date, you won’t know when the transaction happened. If you miss the amount, your records will be incorrect. Always double-check these details before entering anything into a journal.
Many learners rush and record a supplier’s invoice as if it’s already paid, especially when the invoice looks like a receipt. Remember: an invoice means you owe money; a receipt means you’ve paid. For example, Ahmed in Mthatha buys groceries on credit and gets an invoice. He should record it in the Purchases Journal, not the Cash Payments Journal. If he pays later and gets a receipt, then he records it in the Cash Payments Journal. Always read the document carefully. If it says ‘Terms: 30 days’, it’s credit. If it says ‘Paid’ or ‘Cash’, it’s immediate. Another mistake is skipping the step of extracting all details—missing the date or amount can cause confusion during audits. Always pause, read, and check before you write.
Answer: An invoice shows money is owed, not paid.
Invoices are requests for payment, not evidence that money has changed hands. Only a receipt or cash slip proves that payment has been made. If you use an invoice as proof of payment, you might think you’ve paid when you actually still owe money.
Answer: R450
Add all amounts: 200 + 150 + 100 = 450. Forgetting to add all sales is a common error.
Answer: Payment is due in 30 days
'Terms: 30 days' means credit is given, and payment is due in 30 days. Many misread this as cash.
Answer: Buying goods with an invoice
An invoice is used for credit purchases, meaning you will pay later. The other options are all examples of cash transactions, where payment happens immediately. Learners often confuse invoices with receipts, but only invoices show that payment is still outstanding.
Answer: Fraud and errors
Not using source documents can lead to fraud and mistakes. Some think it saves time, but it’s risky.