Books of prime entry
Also called: Books of original entry
What are books of prime entry?
A book of prime entry is where a transaction is first written down, from its source document, before it reaches the ledger.
The sales and purchases day books take goods sold and bought on credit.
The cash book takes money paid into and out of the bank.
The journal takes anything that fits in neither.
Example
A bakery sends a café an invoice. The invoice is written in the sales day book first. At the end of the month the day book is added up and the total is posted to the ledger.
Why it matters
Both the debit and the credit are posted from the book of prime entry. A wrong amount written there is wrong on both sides, so the trial balance does not show it.
Practise it
Ledger Drill is practice, not tax or accounting advice. If this looks wrong, tell us at [email protected].