Accounting | Books of Prime Entry

Books of Prime Entry

Books of prime entry are used to record the transactions of a business.

Examples of Source Documents: purchases, invoice, sales invoice, receipt, debit note, credit note, cheque and petty cash vouchers.

Books of prime/original entry are the books in which the information from source documents is entered.

What do we find in the Books of Prime Entry

Petty cash book - Petty cash transactions.
Cash book - all cash and bank transactions.
Sales journal - credit sales.
Purchases journal - credit purchases.
Sales returns journal - sales returns.
Purchases returns journal - purchases returns.
General journal - all other transactions which can not be entered into the books of prime entry e.g. correction of errors and bad debts written off.

Petty Cash Book

it is used to record small and regular transactions (e.g. buying stamps, sugar, paper towels, bread, juice and envelops).
float - the maximum amount of money received by the petty cashier to pay for petty transactions.

The Imprest System - The petty cashier starts a month with a float. After paying for petty cash items, he or she is reimbursed with the amount equal to what has been used in order to restore the float.

Cash Book

it is used for recording receipts and payments.

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