Learning Unit 7
Debtors (accounts receivable) and creditors
(accounts payable)
The structure of the subsidiary ledgers for debtors and creditors
They do not have a debit and a credit side but are constructed with a
‘statement’ structure with amount columns for the debits, credits, and the
‘running’ balance.
The structure of the debtor’s ledger
Date Code Document no. Fol. Debit Credit Balance
1 2 3 4 5 6 7
1. Used to record the day, month and year of the transaction
2. It is customary to create a coding system to represent the various types of
transactions pertaining to debtors. Example
a. Code no. 1: credit sales according to duplicate credit invoices.
b. Code no. 2: increase in a previously issued credit invoice by means of
a debit note
c. Code no. 3: returns according to duplicate credit notes
d. Code no. 4: cash receipts from debtors
e. Code no. 5: discount granted on prompt settlements
3. The document number for the transaction is entered
4. The journal reference is entered, example: DJ9
5. The debit column is used to enter the amount of the transaction in cases
where the particular transaction increases the amount owing to our business
by the debtor.
6. The credit column is used to enter the amount of the transaction in cases
where the particular transaction decreases the amount owing to our business
by the debtor.
7. The balance column shows the amount owing by the particular debtor as
updated after each individual transaction being the preceding balance
plus/(less) the amount in the debit/(credit) column.
, The structure of the creditor’s ledger
Date Code Document no. Fol. Debit Credit Balance
1 2 3 4 5 6 7
1. This column is used to record the day, month, and year of the transaction
2. As with debtors, a coding system may be used. Example:
a. Code no. 1: credit purchases according to original credit invoices.
b. Code no. 2: increase in a previously received credit invoice by means
of an original debit note received
c. Code no. 3: returns according to original credit notes
d. Code no. 4: payments to creditors (EFT confirmation slip)
e. Code no. 5: discount received on prompt settlements
3. The document number for the transaction is entered
4. The journal reference is entered, example: CJ8
5. The debit column is used to enter the amount of the transaction in cases
where the particular transaction decreases the amount owing by our business
to a particular creditor
6. The credit column is used to enter the amount of the transaction in cases
where the particular transaction increases the amount owing by a business to
a particular creditor
7. The balance column shows the amount owing to the particular creditor after
each individual transaction
Debtors (accounts receivable) and creditors
(accounts payable)
The structure of the subsidiary ledgers for debtors and creditors
They do not have a debit and a credit side but are constructed with a
‘statement’ structure with amount columns for the debits, credits, and the
‘running’ balance.
The structure of the debtor’s ledger
Date Code Document no. Fol. Debit Credit Balance
1 2 3 4 5 6 7
1. Used to record the day, month and year of the transaction
2. It is customary to create a coding system to represent the various types of
transactions pertaining to debtors. Example
a. Code no. 1: credit sales according to duplicate credit invoices.
b. Code no. 2: increase in a previously issued credit invoice by means of
a debit note
c. Code no. 3: returns according to duplicate credit notes
d. Code no. 4: cash receipts from debtors
e. Code no. 5: discount granted on prompt settlements
3. The document number for the transaction is entered
4. The journal reference is entered, example: DJ9
5. The debit column is used to enter the amount of the transaction in cases
where the particular transaction increases the amount owing to our business
by the debtor.
6. The credit column is used to enter the amount of the transaction in cases
where the particular transaction decreases the amount owing to our business
by the debtor.
7. The balance column shows the amount owing by the particular debtor as
updated after each individual transaction being the preceding balance
plus/(less) the amount in the debit/(credit) column.
, The structure of the creditor’s ledger
Date Code Document no. Fol. Debit Credit Balance
1 2 3 4 5 6 7
1. This column is used to record the day, month, and year of the transaction
2. As with debtors, a coding system may be used. Example:
a. Code no. 1: credit purchases according to original credit invoices.
b. Code no. 2: increase in a previously received credit invoice by means
of an original debit note received
c. Code no. 3: returns according to original credit notes
d. Code no. 4: payments to creditors (EFT confirmation slip)
e. Code no. 5: discount received on prompt settlements
3. The document number for the transaction is entered
4. The journal reference is entered, example: CJ8
5. The debit column is used to enter the amount of the transaction in cases
where the particular transaction decreases the amount owing by our business
to a particular creditor
6. The credit column is used to enter the amount of the transaction in cases
where the particular transaction increases the amount owing by a business to
a particular creditor
7. The balance column shows the amount owing to the particular creditor after
each individual transaction
