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

1. Petty cash book - Petty cash transactions.
2. Cash book - all cash and bank transactions.
3. Sales journal - credit sales.
4. Purchases journal - credit purchases.
5. Sales returns journal - sales returns.
6. Purchases returns journal - purchases returns.
7. 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.