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Books of Prime Entry
are books in which
business transactions are first recorded before
they are posted to the
A journal is a book of accounting entries where transactions are recorded chronologically. The journal is also called a day book, a book of prime entry or a book of original entry.
Purchases Journal records all credit purchases of goods meant for resale. (Source documents used: invoices received)
Sales Journal for recording sales of goods on credit. (Source documents used: invoices, sales invoices)
Returns Outwards Journal / Purchases Returns Journal for recording returns of goods previously purchased on credit. (Source documents used: Credit notes received)
Returns Inwards Journal for recording returns of goods previously sold on credit (Source documents used: Credit notes sent)
1. Opening entries
2. Closing entries
3. Sale and purchase of fixed asset on credit
4. Correction of errors, adjusting entries, and others not recorded
in other books of prime entry.
For recording cash transactions involving Cash and Book Accounts.
What are the
Similar transactions are recorded into one book in order of date (e.g. credit sales of goods only into the Sales Journal and so on).
Unnecessary detail in the ledger is cut down as only totals are posted to the ledger.
Use of special journals provides an important middle step between source documents and the ledger accounts
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