FAC1502 Creditors Control Notes

8/16/2019 FAC1502 Creditors Control Notes

1/12

GROUP 3E

FAC 1502-S1-2016

UNISA

CREDITORS CONTROL ACCOUNT

[STUDY UNIT 13]

Prepared by Ramashau Aluwani

UNISA E-Tutor: RAMASHAU FAC1502-S1-2016-GROUP 3E 12016-03-27


2/12

STARTING LINE-UP

• Intro

• Creditors Control

•

General Ledger• Golden Rules

• Revision Exercises

• Check-list• Motivational Quotes

2016-03-27 UNISA E-Tutor: RAMASHAU FAC1502-S1-2016-GROUP 3E 2


3/12

INTRODear Honourable Members

We are rolling

Go through the notes on Study Unit 13 and don’t forget to attempt theprevious exam question papers to assess yourself if you have understood thegolden rules and principles.

NB: My advise is that do as many question papers and revision exercises as

possible and make sure you compare your written answer to the solution“Practice Makes it Permanent”

Always remember, there is no better time to pass FAC1502 than this semester.The ball is in your court!!!

Enjoy Easter Sunday!!!

Kind regards

Mr. Ramashau Aluwani

UNISA E-TUTOR: FAC 1502 (GROUP 3E)

“All progress takes place outside the comfort zone” Michael John Bobak



4/12

Creditors• Creditor occurred from purchase of goods and services on credit.

• When creditor is paid within a specific period according to an

agreement, the business may get a discount on outstanding account.

• Settlement discount received is deducted in determining the cost of

purchases.

• Credit purchase transactions are recorded in the purchases journal,

the creditors ledger and creditors control account.

• Liabilities (e.g Creditors) increases on the credit (Cr) side and

decrease on the debit (Dr) side of the account.

• Current liabilities are debts that have to be settled in the short term

usually within a year, e.g Creditors.

• Creditor control account in the general ledger represents all

individual creditors in the creditors ledger.

“ PLEASE NOTE THAT FOR MORE INFORMATION GO TO STUDY GUIDE - STUDY

UNIT 13 (CURRENT LIABILITIES) FROM PAGE 263 ‘’



5/12

Creditors Control Account

• The main purpose of the creditors control account is to

summarize all transactions that influence (change) the

accounts of the individual creditors.

• Once a month, when the totals of all the creditors control

columns in all the subsidiary journals have been determined,

the amounts are posted to the creditors control account.

• Creditors control account reflects a summary of the individual

creditors transactions and the balance of the creditors control

account must equal to the total of the individual creditorsaccount balances.



6/12


Journals to be posted at the end of the month to


Purchases Journal (PJ)

Purchase Returns Journal (PRJ)

Cash Payment Journal (CPJ)

General Journal (GJ)



7/12

GENERAL LEDGER OR T ACCOUNT

• Example of Creditors Control Account in the General Ledger


UNISA E-Tutor: RAMASHAU FAC1502-S1-2016-GROUP 3E 7

Bank CPJ xxx Balance b/d xxx

Purchases returns PRJ xxx Purchases PJ xxx

Journal debits GJ xxx Interest expense GJ xxx

Balance c/d xxx Journal credits GJ xxx

xxx xxx

Balance b/d xxx

2016-03-27


8/12

Take Note of Golden Rules

• If information was omitted or was transferred incorrectly from thesource document to the purchase journal both the creditors controlaccount and the individual creditors account will be affected by themistake.

• If the information was entered correctly in the journal but a postingerror was made to the creditors ledger, the individual creditors accountmust be corrected and the creditors list must be adjusted to correctthe error.

• If an adding mistake was made in one or more columns in the journals,the correction must only be made in the creditors control account

• NB. For summary of procedure refer to page 267 of the Study Guide

• “Undercast” means that the total is less than it should be.

• “Overcast” means that the amounts have been added up incorrectly

and that the total amount is more than it should be.• You are expected to reconcile the total of the list of creditors balances

with the balance of the creditors control account (refer to Page 273 ofthe Study Guide under Required No.2)



9/12

MUST DO EXERCISES

Previous Question Papers Question 2 : Oct-Nov 2013

Question 5 : May-June 2014

Question 1 : Oct-Nov 2015

Tutorial Letter 102

Question 4 (Tutorial 101- Page 10)

Study Guide Revision Exercises

Exercise 13.3 - Page 268-269

Revision Exercise 3 - Page 272-273



10/12

CHECK-LISTNO. TOPIC STATUS TICKBOX

1. STUDY UNIT 1 -5 DONE2. STUDY UNIT 6 & 7 DONE

3. STUDY UNIT 8 DONE



6. ASSIGNMENT NO.1 DONE



11/12

MOTIVATIONAL QUOTES

• Set your goals high, and don't stop till you get there. Bo Jackson

• What you do today can improve all your tomorrows. Ralph Marston

• A creative man is motivated by the desire to achieve, not by

the desire to beat others. Ayn Rand

• I come to win. Leo Durocher• One way to keep momentum going is to have constantly

greater goals. Michael Korda

• Go for it now. The future is promised to no one. Wayne Dyer

• Things do not happen. Things are made to happen. John F. Kennedy

• Do something wonderful, people may imitate it. Albert Schweitzer

• “Go Big or Go Home-Best or Nothing” Ramashau Aluwani

2016-03-2B UNISA E-Tutor: RAMASHAU FAC1502-S1-2016-GROUP 3E 11


12/12

WELL DONE & KEEP IT UP!!!

GO FOR GOLD!!!

THANK YOU!!!


Documents

FAC1502 Creditors Control Notes