BOOKS OF ORIGINAL ENTRY

Books of prime entry

This is where transaction are first recorded,
Source documents are used in preparation of this books
Eg. of source documents
Receipts
Invoice
Credit note
Debit note
Books of original entry?
 Sales daybook/ sales Journal- all credit sales
 Purchases daybook/ - all credit purchases
 Sales returns daybook/ returns inwards daybook- returns inwards
 Purchases returns daybook/ returns outwards daybook- returns outwards
 Cashbook- cash and bank transactions
 General journal/ Journal proper- special transactions

After recording in daybooks transactions are transferred to ledger accounts. Ledgers accounts are
found in books known as ledgers.
There are two types of ledgers
 General ledger
 Subsidiary ledgers

General ledger- this is for assets, capital and liability accounts – DC ADE LIC (LRE)
General ledger has a sub division known as nominal ledger, nominal ledger is for Incomes and
expenses

Subsidiary ledgers- are two are for opening personal accounts

Purchases ledger- creditors ledger/payables ledger – personal accounts for each creditor
Sales ledger- debtors’ ledger/receivables ledger – personal accounts for each debtor

Sales daybook/ sales Journal- all credit sales

Sales invoices are used as source document for preparing this book. Entries in this book are then
transferred to the respective debtors account (debit) in the sales ledger (debtor’s ledger). At the
end of the period totals of this book are then transferred to the credit side of the sales account in
the general ledger.

Purchases daybook/ Purchases Journal- all credit purchases

Purchases invoices are used as source document for preparing this book. Entries in this book are
then transferred to the respective creditors account (credit) in the purchases ledger (creditor’s
ledger). At the end of the period totals of this book are then transferred to the debit side of the
purchases account in the general ledger.
Purchases returns daybook/ returns outwards daybook Journal- Returns outwards
Credit notes are used as source document for preparing this book. Entries in this book are then
transferred to the respective creditors account (debit) in the purchases ledger (creditor’s ledger).
At the end of the period totals of this book are then transferred to the credit side of the returns
outwards account in the general ledger.

Sales returns daybook/ returns inwards daybook Journal- Returns inwards

Credit notes are used as source document for preparing this book. Entries in this book are then
transferred to the respective debtors account (credit) in the sales ledger (debtor’s ledger). At the
end of the period totals of this book are then transferred to the debit side of the returns inwards
account in the general ledger.

2022
May
“ 1 Credit sales: T Thompson £56;; K Barton £145
“ 3 Credit purchases: P Potter £144; B Spencer £76
“ 7 Goods returned by us to: P Potter £12; B Spencer £22
“ 9 Goods returned to us by: T Thompson £5; K Barton £11;