LESSON PLAN
Learning Area: EMS
Grade: 8
Educator(s) Signature:
Duration: 2 Weeks
Date:
HOD Signature:
(4 Hours: 8 periods of 30 minutes)
Topic:
Cash receipt Journal: (Service Concern)
Links with previous Lesson:
Links with next Lesson:
Accounting Cycle
Content:
Cash Payment Journal
Entering of cash transactions in the Cash Receipts Journal (CRJ); closing off of the CRJ; effect of
cash transactions on the accounting equation.
Teacher Activities:
- Informs the learners on the aims of
businesses, reasons why people would want to
start businesses. Main aim being profit making.
-Gives learners the two types of businesses
people can choose from. Service business and
a trading business.
-Gives learners the different types of service
business, E.g plumbers, electricians and
doctors and indicating that the type of income in
a service business is current income.
-Allowing learners to ask questions where
necessary.
-Give learners homework to go and look for
other examples of service businesses they
know off and writing this in their scribblers.
Learner Activities:
-Listen carefully and ask questions for
clarity.
-Randomly asks learners to give other
examples of the service businesses they can
think off.
-Explains that when dealing with cash, you can
either receive cash or pay out cash. When cash
is received the Cash Receipt journal is used.
-Explains the concepts in the Cash Receipt
Journal i.e Receipts, Current income, Capital
and Rent income and give learners handouts
for notes.
- Give examples and are allowed to
ask questions on the examples they
might not be sure off.
- Listen carefully and ask questions
for clarity.
- Write notes in their books.
Period:
1
- Complete the homework as
requested in their scribblers for the
next day.
-Learners paste notes in their books
1
2
- Draws the example of the Cash Receipts
Journal headings on the board.
-Writes the heading indicating the name of the
business, the month, year and the journal
number at the end and explaining why is it
necessary to have the heading in this format.
-Writes in the column headings on the board,
doc, day, folio, details, analysis of receipt,
bank, current income and sundry account
busy explaining the concepts and highlighting
the language errors the learners might make.
-Moves around the class checking on the
learner’s progress in copying the given
headings.
-Educator does the transaction analysis with
learners in class
-Writes transactions on the board.
-Asks the learners to indicate the source
document, account to be debited and the
account to be credited as well as the effect on
A=0+L
-The two transaction are entered into the Cash
Receipt Journal
-Give learners Activity 7 for homework
-Follow the same instruction and draw
the heading in their work-books.
-The educator checks around to see if the home
work has been done and mark work.
-Open their books to show work done
-Exchange books to mark work done
with peers.
-Learners follow the same instruction
and enter the same transactions in
their books.
- learners answer questions posed by
teacher.
- Learners listen carefully and ask
questions for clarity.
3&4
-Learners follow the same instruction
and enter the same transactions into
their books.
-Learners do Activity 7 for homework
-Draws columns on the board for activity 1.
-Read the transactions with the learners asking
them the columns in which the transactions
must be written.
-Writes the correct answer and allocate marks
per entry.
-Give learners Activity 8 to do in class
-Give learners time to complete work on their
own
-Collects the books to be marked and signed
5
-Learners do Activity 8 in class
individually
-Hand in the completed Activity 2 to
the teacher for marking.
-Learners get books back and checks
on their mistakes against the memo
handed out by the teacher
-Listens to the teacher as corrections
are made and do corrections in pencil
-Learners do Activity 9 for enrichment
-Brings back the marked books to class
-Hands out the copies of the correct cash
receipt journal in class.
-Give learners Activity 9 for Enrichment
2
6&7
8
Assessment:
Formative:
Class & homework activities
Summative:
Method:
Formative:
Class work activities – Teacher & peers
Homework activities – Teacher & peers
Summative:
Instrument:
Marking memorandum with solutions
Marking memorandum with solutions
Resources: Textbooks, Class Activities, Class notes
Teacher Reflection:
Expanded Opportunities:
Allow learners to complete extra activities from
textbook used by school if time allows
3
SUBSIDIARY JOURNALS
CASH RECEIPT JOURNAL (CRJ)
TYPES OF BUSINESS ACTIVITIES
Any person who wants to start a business has the same aim and that is to make a
profit. Everybody has certain needs that must be fulfilled, e.g. food, relaxation and a
place to stay. A person who wants to start a business can investigate the needs of
the community and start a business to satisfy these needs. There are two types of
business activities to choose from, rendering a service or trading in stock. Business
can be divided according to their main source of income:
 services, or
 goods
In a service business, the main source of income is fee income or commission
income. Examples of service businesses are plumbers, doctors, electricians, etc. In
accounting we call this services Current income.
A retailing business trades in stock which it buys, adds a profit margin and sells. This
is how they make a profit. A trading business sells goods to get a profit. The income
out of such a transaction is called sales. The expense related to this type of
transaction is called cost of sales. The difference between the sales and cost of
sales is known as gross profit.
In grade 8 we are going to focus on a service business and in grade 9 a retail
business.
SUBSIDIARY BOOKS (JOURNALS)
Introduction
If many recurring transactions take place, it becomes more difficult to record all the
transactions in a ledger. When this happens, a business usually starts making use of
journals. All similar transactions are grouped together in a journal. We call this the
book of first entry. The journal is the first place a transaction will be recorded from
the source document.
Entering service delivery transactions
We are only going to deal with cash transactions of a service business. When
dealing with cash, you can either receive cash or pay out cash. What is the
difference between the two?
Receipts: money received by the business and paid into the business bank account.
Money received will increase the amount of money in the business’s bank account.
Delivering a service by a service enterprise is called services rendered/commission
income. The account that we are going to use for services rendered is Current
income. Before the business starts with operations, the owner has to invest money
into the business. This is called capital. If a business owns his own building, part of
the premises can be rent out to someone. This will be a receipt for the business. The
amount that the business receives every month from the person is called Rent
income.
4
Payments: a business uses cheques to make payments. A cheque payment will
decrease the amount of money in the business’s bank account.
Payments done by a service business are the following:
 tangible/fixed assets purchased for cash
 consumable stock purchased – consumable stock are goods used in
the business, e.g. stationery and material costs (for example, the
material costs for a plumber will be pipes, taps, etc.)
 other expenses paid – water and electricity, insurance, salaries, etc.
The receipts of a business during a month will be entered in the Cash Receipts
Journal (CRJ) and all payments of a business will be entered in the Cash
Payments Journal (CPJ).
CASH RECEIPTS JOURNAL (CRJ)
An example of a Cash Receipts Journal will look as follows:
Cash Receipts Journal (1) of Pretty Plumbers (2) – January 2011 (3) CRJ (4)
Doc Day Details
Fol Analysis Bank Current Sundry accounts (12)
of
income Amount Fol Details
Receipts
(5)
(6)
(7)
(8) (9)
(10)
(11)
(13)
(14) (15)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
Name of the journal/subsidiary book
Name of the business
The month and the year in which the transactions took place
Abbreviation for the subsidiary book as well as the number of the subsidiary
book.
Number of the source document, e.g. receipt for money
received. There are two alternatives for the cash register:
 If the cash register does not print numbers on the roll, a tick (√) is made
in the column.
 If the cash register prints numbers on the roll, the numbers will be
entered in this column.
(Remember: the receipt numbers and the cash register numbers will
not concur)
Day of the month on which the money was received
Details of the receipts. If the business receives money from a person, the
person’s name will be entered. If the money is received for services rendered,
“Current income” will be entered.
Folio number if money is received from debtor (this will be discussed in
Grade 9)
Amounts received during the month. The total received for the day is
calculated and deposited in the bank.
Amounts deposited in the bank account
Analysis column for services rendered.
When there is no analysis column for money received, it is entered in the
Sundry accounts column.
Amounts received that relate to sundry accounts.
Folio reference to which the relevant amount received is posted.
Name of the relevant account to which posting is done.
5
Transaction analysis of Cash Receipts
Transactions:
1 The owner deposited R50 000 as capital contribution in the business bank
account.
2 Cash received for services rendered, R4 900
3 Part of the building is rented to M. Bosch. Receive R5 000 for the first month’s
rent.
Solution:
Nr Source document
1
2
Duplicate receipt
Cash register roll
3
Duplicate receipt
General ledger
Account
Account
debited
credited
Bank
Capital
Bank
Current
income
Bank
Rent
income
Accounting equation
A
+50 000
+4 900
E
+50 000
+4 900
0
0
L
+5 000
+5 000
0
ACTIVITY 7
Note: The aim of the activity is to prepare a Cash Receipts Journal
Sam Molefe started a plumbing business, Sam Plumbers on 1 February 2011.
REQUIRED:
7.1
7.2
Record the following transactions in the Cash Receipts Journal for February
2011. Provide analysis columns for Analysis of Receipts, Bank, Current
Income and sundry accounts. Close off the journal at the end of the month.
Analyse the transactions for day 1 and day 10.
6
Transactions: February 2011
1
6
10
18
Sam Molefe deposited R80 000 into the business bank account as capital contribution. Issue receipt 001
Cash received for services rendered, R12 400.
Cash received for services rendered, R6 800.
Cash received for services rendered, R9 400.
ANSWER SHEET
Cash Receipts Journal of Sam Plumbers – February 2011
Doc Day
Details
Fol Analysis
Bank
of
Receipts
001 1
Sam Molefe
80 000
√
6
Current income
12 400
12 400
√
10
Current income
6 800
6 800
√
18
Current income
9 400
9 400
108 600
CRJ
Current
income
Amount
80 000
12 400
6 800
9 400
28 600
80 000
Transaction analysis
Nr Source document
1 Duplicate receipt
10 Cash register roll
General ledger
Account
Account
debited
credited
Bank
Capital
Bank
Current
income
Accounting equation
A
+80 000
+6 800
7
E
+80 000
+6 800
L
0
0
Sundry accounts
Fol
Details
Capital
ACTIVITY 8
Note: The aim of the activity is to prepare a Cash Receipts Journal
David Davids started an electricians business, Davido Electricians on 1 July 2011.
REQUIRED:
8.1 Record the following transactions in the Cash Receipts Journal for July 2011.
Provide analysis columns for analysis of receipts, bank, current income and
sundry accounts. Close off the journal at the end of the month.
8.2 Analyse the transactions for day 1 and day 8.
Transactions: July 2011
1
8
19
25
David Davids deposited R50 000 into the business bank account as capital
contribution. Issue receipt 001
Cash received for services rendered, R7 400.
Cash received for services rendered, R10 300.
Cash received for services rendered, R6 400.
8
ANSWER SHEET
Cash Receipts Journal of Davido Electricians – July 2011
Doc Day
Details
Fol
Analysis
Bank
of
Receipts
001 1
David Davids
50 000
√
8
Current income
7 400
7 400
√
19
Current income
10 300
10300
√
25
Current income
6 400
6 400
74 100
CRJ
Current
income
Amount
50 000
7 400
10 300
6 400
24 100
50 000
Transaction analysis
Day Source document
1
8
Duplicate receipt
Cash register roll
General ledger
Account
Account
debited
credited
Bank
Capital
Bank
Current income
Accounting equation
A
+50 000
+7 400
9
E
+50 000
+7 400
L
0
0
Sundry accounts
Fol
Details
Capital
ACTIVITY 9
Note: The aim of the activity is to prepare a Cash Receipts Journal
Mary Radebe started a hairdressing business, Mary Hairstylists on 1 March 2011.
REQUIRED:
9.1 Record the following transactions in the Cash Receipts Journal for July 2011.
Provide analysis columns for analysis of receipts, bank, current income and
sundry accounts. Close off the journal at the end of the month.
9.2 Analyse the transactions for day 1 and 27.
Transactions: March 2011
1
10
18
27
Mary Radebe deposited R150 000 into the business bank account as capital
contribution. Issue receipt 001
Cash received for services rendered, R5 600.
Cash received for services rendered, R4 300.
Cash received for services rendered, R10 400.
Part of the building is rented out to J. Abrahams. Receive R5 800 and issue
receipt 002.
10
ANSWER SHEET
Cash Receipts Journal of Mary Hairstylists – March 2011
Day
Details
Fol Analysis
Bank
Current
of
income
Receipts
001 1
Mary Radebe
50 000
√
10
Current income
5 600
5 600
5 600
√
18
Current income
4 300
4 300
4 300
√
27
Current income
10 400
10 400
002
J. Abrahams
5 800
16 200
76 100
20 300
CRJ
Sundry accounts
Doc
Amount
Fol
Details
50 000
Capital
5 800
55 800
Rent income
Transaction analysis
Day
1
27
Source document
Duplicate receipt
Cash register roll
Duplicate receipt
General ledger
Account
Account
debited
credited
Bank
Capital
Bank
Current income
Bank
Rent income
Accounting equation
A
+150 000
+10 400
+5 800
11
E
+150 000
+10 400
+5 800
L
0
0
0