Books of Prime entry
*Books of Prime entry are the books in which we first record transactions.
*These are not accounts; they are simply books that records the details of a transactions, almost like a diary.
*The firm will have a separate book for each kind of transaction. The type of the transaction will affect which book it, is entered into.
*Sales will be entered in one book, purchases in another book, cash in another book, and so on. The books of prime entry are used to record the following:
• The date on which each transaction took place - the transactions should be shown in date order;
• Details relating to the transactions are entered in a 'details' column; e.g. name of customer/supplier
• The monetary amounts are entered in columns included in the books of original entry for that purpose.
Advantages of keeping books of original entry
• Accounts can be found more easily by the use of the cross referencing nature of the books of original entry being kept.
• If records are lost then the ledgers and the books of original entry acts as a backup for each other. • Acts as a 'listing device' for posting totals to various accounts, thereby saving labour.
• The commonly used books of original entry together with source document it used to record transactions are:
Comparison Chart
| book of prime entry | traction types | souece documents |
|---|---|---|
| Sales day book (or Sales journal | for credit sale | Sales invoice |
| Purchases day book (or Purchases journal) | for credit purchases | Purchase invoice |
| Sales returns day book/
Returns inwards day book | for returns inwards/ sales return | Credit notes |
| Purchases returns day
book/ Returns outwards | for returns outwards/ purchase return | Debit note |
| cash book | for receipts and payments of cash and cheques | Cheque counterfoils, paying in slip |
| Petty cash | all small transactions | petty cash voucher |
recorded any where covered by the above
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