[Music] [Music] good day green islanders and welcome to tomamina teaching you're tuned into your second lesson of term two and today we'll be looking more deeply into the concept of debtors specifically looking at source documents and journals in the previous lesson you learned about credit sales let's quickly recap on this concept and everything that goes along with it a debtor is a person who owes money to the business when buying goods on credit a credit invoice is the source document as proof for credit sales a debtors journal or dj is the book of first entry where all credit sales are recorded for a month today we will be looking at the debtors journal or dj and the source documents that are used in accordance with it the first document is the credit invoice the original invoice goes to the client that bought the goods on credit from our business the duplicate is kept by the business that has sold the good to the client okay great eye learners let's look at example of a credit invoice number one first you should write the invoice number number two then write the date on which the transaction took place in this case it was the 20th of march thirdly it is also important to have all the information of the client or buyer their name and their address number four complete the details of goods sold i.e quantity description and unit price fifth multiply quantity by the unit price and write the total amount under the column for amount lastly number six add all the amounts and write the total amount owed okay let's look at this example once again [Music] [Music] okay let's look at the data's journal now remember grade 9 learners we use the debtors journal when someone has bought goods on credit the heading of the debtors journal must state the following firstly the name of the journal secondly the name of the business thirdly month and year and lastly folio number which is your first journal when starting a business will be dj one the next will be dj two and so on all right so let's look at the different columns you will remember some of these ones from the other source documents we've done on the previous lessons firstly document number will be the first column this is the source document that was used for example when an invoice was issued you will write the number of the invoice on this column note that the invoice numbers will be in a numerical order if the first one is all one then the next one will be o2 and so forth secondly the second column is the day column it is used to write the day on which the transaction took place thirdly the debtors the debtors column is used to write the name of a person or business to which the goods were sold on credit as we already know this person or business is called the debtor fourthly the folio column is for the folio number it is used for cross reference i.e to show the number of the account in the debtors ledger this will make more sense later when i will be explaining more on the debtors ledger fifth in the sales column we will record the total selling price of goods sold on credit sixth the cost of sales the total cost for the goods sold is shown here this can be given or you may be required to calculate it these calculations are something you already know how to do seventh or the last one is dj1 details journal number one this is the folio number of the journal d for debtors j for journal and one for the specific number of the journal so let's run through the data's journal once again [Music] let's look at the practical example or two to see how this theory comes to life we will be looking at ikasikovo company they are using a profit markup of twenty percent on cost the first example is as follows goods were sold to femi traders for four thousand eight hundred rand on credit issued invoice number fifty seven remember grade nine learners before we look at the example we first have to stop evaluate and look at the keywords in the example in this example the keywords are credit and invoice and this identifies as a dj a debtor's journal the invoice number is 57 the day was the fourth folio will only be recorded when we learn about the debtors journal the sales column is 4 800 grand all of this information was given to us we now have to calculate the cost of sales column ourselves do you remember that formula so grade nines when you see cost of sales think grid firstly you should draw the grid remember cost price cp plus profit margin equals the selling price remember the cost price is always a hundred percent in this case the profit margin was twenty percent which means the selling price is hundred and twenty percent after you have recorded the grid you should use the formula in this case the unknown is the cost price and the known is the selling price four thousand eight hundred grand times a hundred divided by 120 that equals to 4 000 grand so this means the cost of sale is 4 000 rand let's look at another example sold goods on credit for 3 600 rand to hakim suppliers before we rush into the example remember we have to stop evaluate and look at the keywords in the transaction the word credit means the transaction should be recorded on what three two one on the debtor's journal the dj the previous invoice number was 57 so that means that this one will be 58 then it's the date debtor's name sales column let's see if you can calculate the cost of sales column the answer is 3 000 ran did you get that answer correct don't worry if you haven't gotten yet let's do this example together remember it's unknown divided by the no 3 600 grand times a hundred divided by a hundred and twenty that equals to three thousand grand okay you're now on your own grade nines the next two transactions you should do by yourself all right green eyeliners here's the table behind me press that pause button and fill up the table by yourself three two one let's go all right great nightliners now this is the answer this is how your table should look like now let's look at the second example and see if you will get it correct three two one let's go all right green eye learners that is the second table if you got it correct well done if you're still struggling go through the examples once again and i'm sure you'll be all sorted okay so what happens to the debtor completely pays off the account if the data settles the account the business receives money and the receipt is issued the original receipt is given to the customer and the duplicate serves as the source document for the business which is used as a first entry money is received so the transaction should be recorded on the cash receipts journal crj an analysis column for debtors control will be opened as debtors pay their debt let's do a recap on the receipt layout as you've already done on the previous lessons let's look at the receipt behind me once again the date receipt number data's name the amount and our business name is very important information that should be on a receipt let's look at the example below and see what this transaction looks like received one thousand five hundred grand on the second of march 2022 from d takarai as partial payment on his account issue received 34. now remember gridlines before we start this example we have to stop evaluate and circle the most important words on this transaction the words received partial payment and receipt number all indicate that the debtor has paid off his account or at least a part of it you will see that there is an extra column in the crj named the debtors control this is the column that you will use to record when debtors pay that credit the receipt number should be recorded on the dock column the date the receipt was issued the date the receipt was issued is the 2nd of march the name of the debtor is d takarai in this case and the total amount of the receipt 1500 grand which will be recorded in the analysis of receipt bank and debtors control column let's look at the transaction one more time [Music] all right grade nines this brings us to the end of lesson two today we looked at the debtors journal and the source documents that go along with it in the next lesson we'll be exploring the posting of the dj into the general ledger remember if you're watching this on youtube check the self mocking assessment and the google slides below [Music] [Music] you