This document discusses special journals and provides an example to illustrate how they work. Special journals are used to summarize multiple transactions that are posted to general ledger accounts. This reduces clutter in the general ledger. The example shows transactions for a business owner and the related journal entries recorded in the cash receipts journal, cash payments journal, debtors subsidiary journal, and creditors subsidiary journal. The purpose of special journals is to record credit sales, credit purchases, cash receipts, and cash payments in a clear, organized manner that feeds into the relevant control accounts.
2. Introduction
• With large number of day to day
transactions(more than 100
transactions per day) business will
end up having staggered/clustered
accounts in the control accounts
this will take time, and even
confuse bookkkeers or even worse
lead to theft.
• That’s when special journals
comes…
3. What is a special journal
• It’s a subsidiary journal used to summarise multiple transactions that
are posted to general ledger accounts.
• You’ve seen under Debtors control account on the debit side
appearing contra account of Sales worthing up to R 150 000 for stock
sold.
• Were does that amount comes from and why doesn’t it show the
transaction which led to the result of it?
• It the transactions were all recorded in the special journals
4. For types of
subsidiary journals
Cash Receipts Journal
Cash payment jourmal
Debtors Subsidiary journal- Also known
as Sales journal because its used to
record all credit sales.
Creditors subsidiary journal- Known as
Purchases journal- used to record all
credit purchases journal.
5. Example
• Mr Jon sell gates on credit, , he also buy from his suppliers on credit. In October Mr Jon had the following balances
in his books.
Debtors R4 400
Air Con PLK R1 000
Tik-Tok GP R3 400
Creditors R2 000
Quick matals R700
Timmy turners R1 300
The following transaction took place in October 2020:
1 Sold gates to Air Con PLK for R400 Invoice A001
2 Bought metals from Quick metals for R1 000, Invoice 31
6 Received R3 000 in full settlement of the balance R3 400 from Tik Tok GP, issued receipt R122
14 Returned goods to Quick metals worth R500
15 Paid Timmy turners R1 000 in full settlement of the balance R1 300, Cheque C-11
17 Air Con PLK was unable to pay the remaining balance, therefore its estate paid 50% of the balance. Issued receipt
R123
18 Sold gates to Tik Tok GP for R 1 300, issued invoice T011
Required:
1. Prepare the individual accounts
2. Prepare debtors and creditors list
3. Prepare the control accounts
6. Formats
• Cash receipt journal
Day Doc/Receipt Details/Account
debited
Bank
(DR)
Debtors
control
(CR)
Discount
allowed
Sales
(CR)
Cost
of
sales
(DR)
Sundry accounts
6 R122 Tik Tok GP 3 000 3 400 (400)
17 R123 Air Con PLK 700 1 400
3 700 4 800 (300)
7. Cash Payment Journal
Day Doc/cheque Details/accounts
debited
Bank
(CR
Creditors
Control
(Dr)
Discount
received
(CR)
Purchases/Inventory
(DR)
Sundry Accounts
15 C-11 Timmy Turners 1 000 1 300 (300)
1 000 1 300 (300)
8. Debtors subsidiary
journal
Day Invoice Account
debited/Details
Debtors
control
(DR)
Sales
(CR)
1 A00 Air Con 400 400
18 T011 Tik Tok GP 1 300 1 300
1 700 1 700