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By the end of this topic, you should be able to:
When a business makes a transaction — for example, selling goods on credit or paying a supplier — that transaction needs to be recorded. But before it goes into the main accounting records (called the ledger), it is first written down in a book of prime entry.
Think of books of prime entry as a sorting station. Every transaction is captured in the right "book" first, and then the information is sent to the ledger accounts later.
Books of prime entry are also called:
| Book of Prime Entry | What It Records |
|---|---|
| Cash Book | All receipts and payments in cash and by bank |
| Petty Cash Book | Small, everyday payments in cash |
| Sales Journal | Credit sales of goods |
| Sales Returns Journal | Goods returned by credit customers |
| Purchases Journal | Credit purchases of goods |
| Purchases Returns Journal | Goods returned to credit suppliers |
| General Journal | All other transactions not covered above |
Every entry in a book of prime entry is taken from a business document — a paper or electronic record that proves a transaction happened.
| Book of Prime Entry | Business Document Used |
|---|---|
| Sales Journal | Sales invoice (issued to customer) |
| Sales Returns Journal | Credit note issued to customer |
| Purchases Journal | Purchase invoice received from supplier |
| Purchases Returns Journal | Debit note issued to supplier / Credit note received |
| Cash Book | Paying-in slips, cheques, bank statements, receipts |
| Petty Cash Book | Petty cash vouchers / receipts |
| General Journal | Invoice for non-current assets or other suitable document |
TRANSACTION → BUSINESS DOCUMENT → BOOK OF PRIME ENTRY → LEDGER ACCOUNTS
For example: A business sells goods on credit to a customer for USD 100.
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