2.2. Books of original entry are determined

1. Meaning of Books of Original Entry

These are records where transactions are first written down using data from source documents such as invoices, receipts, and credit notes.

They help to:

• Summarize similar types of transactions

• Reduce the workload in the general ledger

• Provide a clear audit trail

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2. Types of Books of Original Entry (Subsidiary Books)

1. Sales Journal (Sales Day Book)

• Records credit sales of goods.

• Uses sales invoices as source documents.

2. Purchases Journal (Purchases Day Book)

• Records credit purchases of goods.

• Uses purchase invoices.

3. Sales Returns Journal (Returns Inwards Book)

• Records goods returned by customers.

• Uses credit notes issued.

4. Purchases Returns Journal (Returns Outwards Book)

• Records goods the business returns to suppliers.

• Uses debit notes issued.

5. Cash Book

Records all cash and bank transactions:

• Cash receipts

• Cash payments

• Cheques received and issued

• Bank transfers
  Acts as both a book of original entry and a ledger.

6. Petty Cash Book

• Records small, regular expenses such as postage, transport, refreshments, stationery.

• Uses petty cash vouchers.

7. General Journal (Journal Proper)

Used for transactions that do not fit in other books, such as:

• Opening entries

• Closing entries

• Correction of errors

• Depreciation entries

• Adjusting entries

• Transfers between accounts

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3. Purpose of Books of Original Entry

Books of original entry are used to:

• Record transactions in chronological order

• Group similar transactions for simplicity

• Provide accurate details for posting to ledger

• Reduce errors in the accounting system

• Keep clear documentation for audits

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4. Summary Table for Exams