4.5 Recording payments to creditors

Economic and management sciences

Grade 9

Business, consumer and financial knowledge and skills

Module 20

Recording payments to creditors

ACTIVITY1:

To record payments to creditors

[LO 3.3]

When the amounts owed to creditors are paid, a cheque (that serves as source document) is issued. The entry is made in the CPJ in an additional column headed Creditors Control.

The effect of the transaction on the accounting equation is as follows:

• Assets - (Bank decreases)
• Liabilities - (Creditors decrease)

ASSIGNMENT 1: Creditors Journal and Cash Payments Journal

• Record the following information for Marais Dealers in CJ 3.4.1 for March and CJ 3.4.2 for April 2003, and in CPJ 3.4.1 for April 2003. The original invoices received from suppliers have been renumbered.

2003

March 3 No. 316 from Bengo Wholesalers for goods, R1 560

4 No. 317 from Situ and Co. for packaging material, R625

5 No. 318 from Banda Ltd. for repairs to vehicle, R380

6 No. 319 from Pento and Son for stationery, R345

10 No. 320 from Pento and Son for advertising poster, R258

20 No. 321 from Bengo Wholesalers for goods, R780

2003

April 4 No. 322 from Situ and Co. for goods, R560

8 No. 323 from Bergtuin Motors for delivery vehicle, R7 500

12 No. 324 from Banda Ltd. for repairs to delivery vehicle, R330

16 No. 325 from Pento and Son for stationery, R280

20 No. 326 from Bengo Wholesalers for goods, R757

• Cheque counterfoils

2003

April 2 No. 642 to Bengo Wholesalers in settlement of account, R2 340

3 No. 643 to Pento and Son in settlement of their account, R603

6 No. 644 to the municipality for water and electricity, R110

8 No. 645 to Situ and Co. in settlement of their account, R625

10 No. 646 to Boland Wholesalers for goods, R950

14 No. 647 cash for wages, R210

15 No. 648 cash for personal use of the owner, R500

18 No. 649 to Maxi Suppliers for the following:

Goods, R600

Cash register, R400

20 No. 650 to Prompt Printers for advertising posters, R235

30 No. 651 to the manager, M. Meintjies, for salary, R1 250

CASH PAYMENTS JOURNAL OF MARAIS DEALERS - APRIL 2003 CPJ 3.4.1

CREDITORS JOURNAL OF MARAIS DEALERS – MARCH 2003 CJ 3.4.1

CREDITORS JOURNAL OF MARAIS DEALERS – APRIL 2003 CJ 3.4.2

ASSIGNMENT 2:

• Enter the transactions below in the correct auxiliary journals. Close by calculating the column totals. (Use CRJ 3.4.1, CPJ 3.4.2, DJ 3.4.1 and CJ 3.4.3.)

November

1 A. Enslin, the owner, deposits a capital contribution of R20 000 – Receipt no. 001 is issued to him

Purchases equipment to the value of R2 630 from Pronto Ltd and receives credit invoice number 100 (renumber) together with the equipment

2 Cash sales of goods for R500 (cp. R400)

Cheque 001 to the value of R7 800 is issued to Highway Motors for the purchase of a vehicle