Professional Documents
Culture Documents
A book of prime entry is one in which transactions are recorded before being entered in the ledger.
Alternative names
Books of original entry or subsidiary books or day book (as transactions should be recorded in these
before they’re entered in the ledger).
Uses/purposes
- Listing devices that group similar types of transactions which is useful when posting to the
ledger.
- A lot of detail is removed from the ledger
- Provide lists of the credit sales and credit purchases
- That book-keeping can be divided between several people
- Assist in gathering and summarizing of accounting information
- Useful when preparing control accounts
Examples
-
-
In 1,2,3,4 only purchases of goods are included. Purchases or other NCA are excluded.
Sales journal - a list of names of businesses to which credit sales were made, the value of the goods
sold and the date on which the sales were made.
Alternative names
credit the sales account in the nominal ledger with the sales journal total.
This will now form the double entry for all the individual debit entries in the sales ledger.
The sales returns journal - a list of the names of businesses, the value of goods returned and the
dates on which the returns were made.
Alternative names
the sales returns book or the returns inwards book (or returns inwards journal).
This journal is written up using copies of the credit notes sent to the customers.
Enter the date, customer name and credit note total in the sales returns journal.
Credit the customer's account in the sales ledger with the credit note total.
Debit the sales returns account in the nominal ledger with the sales returns journal total.
This will now form the double entry for all the individual credit entries in the sales ledger.
The purchases journal - a list of the names of businesses from which credit purchases made, the
value of the purchases and the dates on which the purchases were made.
Alternative names
Enter the date, supplier name and the invoice total in the purchases journal.
Credit the supplier's account in the purchases ledger with the invoice total.
The purchases returns journal - a list of the names of businesses, the value of goods returned
and the dates on which the returns were made.
Alternative names
the purchases returns book or the returns outward book (or returns outward journal).
Enter the date, supplier name and the credit note total in the purchases returns journal.
Debit the supplier's account in the purchases ledger with the credit note total.
Credit the purchases returns account in the nominal ledger with the purchases returns journal
total.
This will now form the double entry for all the individual debit entries in the purchases ledger.
Trade discount may be shown in the journals for information purposes but is never entered in the
double entry records or ledger accounts.