Grade 9 EMS: Lesson 5.1 - Posting the CRJ to the General Ledger

Overview

• Focus: How to post the CRJ (Cash Receipts Journal) to the General Ledger and balance it.
• Structure: Lesson split into two parts; Lesson 5.1 covers CRJ, and Lesson 5.2 will cover CPJ (Cash Payments Journal).

The General Ledger

• Two Main Accounts:
  1. Balance Sheet Accounts
     • Equity Accounts (Capital and Drawings)
     • Assets
     • Liabilities
  2. Nominal Accounts
     • Income Accounts
     • Expenses Accounts

Posting Order & Dalek Acronym

• Use the acronym DALEK to determine increases/decreases:
  • Drawings, Assets, Expenses/Losses: Increase on Debit side, decrease on Credit side.
  • Liabilities, Income, Capital: Increase on Credit side, decrease on Debit side.

Double Entry Principle

• For every debit entry, there must be a corresponding credit entry.
• Golden Rules:
  1. Column total is posted on the last day of the month.
  2. Sundry account is posted on the date of the transaction.

Practical Example

• Transaction: Business purchased trading stock for R5,500 on 20th by EFT.
  • Bank: Credited (R5,500) - Asset decreases, money out.
  • Trading Stock: Debited - Asset increases.
  • Double Entry Applied: Same amount credited and debited.

More Complex Example

• Transaction on 31st: Sold goods for R4,500; cost price R3,000.
  • Bank: Debited - Asset increases, money in.
  • Trading Stock: Credited - Asset decreases, stock out.
  • Sales: Credited - Income increases.
  • Cost of Sales: Debited - Expense increases.

Activity: Establishing a General Ledger

• Example Transactions at end of June 2021:
  • Capital: R150,000
  • Trading Stock: R117,700
  • Bank: R59,300
  • Sales: R93,000
  • Cost of Sales: R77,500
  • Rent Income: R50,000
  • Rent Expense: R11,000
  • Wages: R27,500
• Task: Open and balance the general ledger accounts.

Posting CRJ to the General Ledger

• Steps:

  1. Bring down balances (e.g., Capital on credit side).
  2. Apply principles and golden rules (e.g., Bank as an asset increases on debit side).
  3. Post totals at end of month (column totals) and sundry on transaction date.

• CRJ Table Example:

  • Post to General Ledger following DALEK and principles.

Conclusion

• Lesson 5.1 concludes with a focus on CRJ.
• Next Lesson 5.2 will focus on CPJ (Cash Payments Journal).