Creditors Journal (Grade 10 NSC Matric Accounting): Revision Notes
Creditors journal
Introduction
The Creditors Journal is a subsidiary journal used by a sole trader to record all purchases made on credit. When a business buys goods or services from suppliers and doesn't pay immediately, these transactions must be properly documented. The Creditors Journal helps organise this information, showing what the business owes to each supplier and what types of items were purchased.
Proper documentation of credit purchases is essential for maintaining accurate financial records and managing supplier relationships. The Creditors Journal provides a systematic way to track all amounts owed to suppliers in one centralized location.
Structure of the Creditors Journal
The Creditors Journal is organised in a table format with specific columns. Here's what the standard layout looks like:
| Doc | Day | Creditor | Fol | Creditors control | Trading stock | Stationery | Sundry account | ||
|---|---|---|---|---|---|---|---|---|---|
| Amount | Fol | Details |
The heading at the top should include the name of the journal, the business name, and the month being recorded. For example: "Creditors Journal of Enough Traders - May 2010". You'll also see a folio reference number for the journal itself (like CJ (2)), which indicates the page or reference number.
The table structure may look complex at first, but each column has a specific purpose that makes tracking credit purchases much easier. Think of it as a filing system where everything has its designated place.
Understanding each column in detail
Doc (Document number) – This is where you write the invoice number from the supplier. The business should assign sequential numbers to all invoices received (re-numbering them if necessary) and list them in numerical order.
Day – Record the day of the month when the purchase occurred.
Creditor – The supplier's name.
Fol (Folio) – Links to the supplier’s account in the Creditors Ledger and is posted daily.
Creditors control – The total amount owed for the purchase.
Trading stock – Goods purchased for resale.
Stationery – Office supplies bought on credit.
Sundry account – Used for all other items:
- Amount
- Folio
- Details
The analysis columns help separate spending by type.
Understanding trade discount
Trade discount is a price reduction for regular or bulk buyers.
It is NEVER recorded in the books.
Only the net amount (after discount) is recorded.
Formula:
Worked example
Worked Example: Calculating Net Purchases with Trade Discount
Goods valued at R6 800 are bought with a 20% trade discount.
Step 1:
Trade discount =
Step 2:
Net purchase = R6 800 - R1 360 = R5 440
Step 3:
Record only R5 440 in the Creditors Journal.
Important: R6 800 and R1 360 are not recorded in the books.
Recording different types of transactions
Examples from Lonely Traders (June 2010):
Worked Example 1 (4 June)
Invoice for trading stock from RN Wholesalers for R12 400, less 20% discount.
- Trade discount = R2 480
- Net purchase = R9 920
Record:
- Doc: 87
- Day: 4
- Creditor: RN Wholesalers
- Creditors control: R9 920
- Trading stock: R9 920
Worked Example 2 (7 June)
Buy on credit from Sam Distributers:
- 3 filing cabinets @ R2 000 = R6 000
- 300 files @ R2 = R600
- Total = R6 600
Record:
- Doc: 88
- Day: 7
- Creditor: Sam Distributers
- Creditors control: R6 600
- R6 000 → Sundry (Equipment)
- R600 → Trading stock or Stationery (depending on use)
Worked Example 3 (11 June)
Buy packing material from Davido Traders for R840.
Record:
- Doc: 89
- Day: 11
- Creditor: Davido Traders
- Creditors control: R840
- Sundry: R840 (Packing material)
Worked Example 4 (17 June)
Buy trading stock from RN Wholesalers for R14 000.
Record:
- Doc: 90
- Day: 17
- Creditor: RN Wholesalers
- Creditors control: R14 000
- Trading stock: R14 000
Worked Example 5 (23 June)
Invoice from MN Motors for R3 900.
Owner serviced personal vehicle → Drawings.
Record:
- Doc: 91
- Day: 23
- Creditors control: R3 900
- Sundry: R3 900 (Drawings)
Worked Example 6 (28 June)
Buy stationery from Sam Distributers for R780.
Record:
- Doc: 92
- Day: 28
- Creditors control: R780
- Stationery: R780
Important accounting principles
Daily posting – Post to individual accounts in the Creditors Ledger every day.
Daily posting prevents accumulated errors.
Analysis columns – Separate purchases by type.
Sundry account flexibility – Used when no other column applies.
Control totals –
Creditors control total must equal the sum of all analysis columns.
If totals don't match, an error exists.
Practical tips for Grade 10 students
- Show trade discount calculations.
- Keep transactions in date order.
- Use the correct analysis column.
- Record owner’s personal spending as Drawings.
- Remember double entry: debit asset/expense, credit creditor.
Common Exam Mistakes:
- Recording the gross instead of net amount
- Forgetting to show discount calculations
- Misclassifying spending
- Missing folio details
- Forgetting sequential invoice numbers
Key Points to Remember:
- The Creditors Journal records all credit purchases.
- Every transaction needs a document number, date, creditor name, and total amount.
- Record only net amounts after trade discounts.
- Use analysis columns appropriately.
- Sundry accounts catch everything else.
- Net purchase formula:
- Post daily to the Creditors Ledger.
- Check that totals balance every month.