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Books of Original or Prime Entry

The document outlines the books of original entry used in accounting, detailing seven types including sales, purchases, and general journals, as well as cash and petty cash books. It explains the purpose of each book and the corresponding transactions recorded, such as credit sales and purchases. Additionally, it describes various business documents involved in purchasing processes, including purchase requisitions, invoices, and credit notes.

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Deandra Maharaj
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28 views10 pages

Books of Original or Prime Entry

The document outlines the books of original entry used in accounting, detailing seven types including sales, purchases, and general journals, as well as cash and petty cash books. It explains the purpose of each book and the corresponding transactions recorded, such as credit sales and purchases. Additionally, it describes various business documents involved in purchasing processes, including purchase requisitions, invoices, and credit notes.

Uploaded by

Deandra Maharaj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Books of Original or Prime Entry

The books of original entries are used to record the “original” information from the source
documents.

For example, if you are working as a sales clerk in a small boutique and you sold a bracelet,
you would issue a receipt (source document) to the customer. Next you would write in your
cash book (book of original entry) the cash sale and how much money you received.

There are seven (7) books of original entry.

There are also called: Day Books, subsidiary books, books of prime entry and journals.

The Journals Books


Sales Journal Cash Book
Purchases Journal Petty Cash Book
Purchases Return Outwards Journal
Sales Return Inwards Journal
General Journal
Descriptions
 Sales Journal (Sales Day Book) – Each time CREDIT SALES are made it is recorded in
this book. It gives details of the date of sales, to whom & the amount.

 Purchases Journal (Purchases Day Book) - Each time CREDIT PURCHASES are made
the information from the invoice received from the suppliers are recorded in this book.

 Return Outwards Journal (Purchase Return Day Book) - This is used each time goods are
returned to suppliers it is recorded in this book.

 Return Inwards Journal (Sales Return Day Book) – This is used each time goods are
returned to the business by customers. A credit note is then issued to the customer.

 The General Journal - This is used to record items that are much less common and
sometimes complicated and are not recorded in any other book of original entry.

 Cash Book – is used to record all transactions made by cash or banking transactions
(e.g. cheque payments). It is both a book of original entry and part of the double entry system
as it contains the balance of both cash in hand and cash at bank.

 Petty Cash Book - A cash book used for making small (petty) payments, details of which
are entered from petty cash vouchers supported, if possible, by a receipt. E.g. purchase of
staples for the staple machine; travel expenses
Book of Original Entry – Multiple 6) When is a credit note issued to
Choice customer?
1) The books in which the business o When a credit customer returns
first records a transaction from goods to the business.
source documents is called
o When the customer purchases
_______________?
goods on credit.
o Books of original entry
o When goods are on a discount
o Income statements sale.
o Statements of Financial Position 7) In which book of original entry are
banking transactions recorded?
2) Which of the following is NOT a
journal in accounting? o Cash book
o General o Petty cash book
o Sales o Purchases journal
o Invoice 8) When a business makes very small
payments where is this recorded?
3) Which book of prime entry records
CREDIT SALES. o Sales journal
o Purchases journal
o General journal
o Sales journal
o Sales return journal o Petty cash book
4) What does 'credit sales' mean?
o Sales in which goods are paid for 9) Which book of original entry is part of
at a later date the double entry system?
o Sales which are paid for
o Sales return journal
immediately
o Sales made with a credit card o Purchases journal
5) What type of transactions are o Cash book
recorded in the purchases journal?
o Petty cash book
o Credit purchases
o Credit sales
10) Another name for return inwards
o Cash purchase journal.
o Purchases return
o Sales return
o Sales day book
Business Documents
• Purchase requisition – In a large organisation, this is sent by the department manager to

the Purchasing department requesting the items to be purchased.

• Purchase order – A customer or the Purchasing department of a large organisation will

decide what goods or services they require and issue a ‘purchase order’ to the supplier.

• Delivery note – The supplier subsequently delivers the goods accompanied by a ‘delivery

note’. This document contains details of the goods being delivered upon which the customer

will sign for their receipt.

• Invoice – The supplier then sends an ‘invoice’ to the buyer detailing the goods or services

supplied and the amount due for payment.

• Debit note or Returns note – Should any goods be faulty or unsatisfactory the buyer will

return them to the supplier together with a ‘debit note’ requesting an allowance in respect of

the goods returned.

• Credit note – Upon receipt of the faulty goods and ‘debit note’ the supplier issues a ‘credit

note’ indicating the amount of refund/allowance due to the buyer.

• Statement of account – At the end of the month the supplier issues a ‘statement’ to the

buyer showing the opening balance then listing the invoices and credit notes issued and any

payment received and the amount due.

• Remittance advice – Any payment made should be accompanied by a ‘remittance advice’

detailing the invoices, credit notes making up the payment.

• Receipt – When goods are purchased and paid for immediately by cash then a receipt is

issued, usually via a cash-till-generated document. A handwritten receipt may also be given.
Sales System

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