Cambrige Notes: Books of Original Entry

• These are the books in which transactions are first recorded for example when a credit sale is made.
• They are also known as subsidiary books.
• When a transaction takes place in the business it is often important and imperative to record as much details about a transaction as possible.
• There is a separate book for each kind of transaction.
• The nature of a transaction determines which book it is recorded into.
• Sales are recorded in their own books, Purchases in another and Cash in yet another and so on.
• The following details are recorded in the Books of Original entry:
• The date of the transaction-the transactions are grouped and arranged according to their dates.
• A details column where the details of the transaction are recorded.
• A folio column where an entry which points to the where the information is recorded in the ledger for example an the account number in the Sales/Purchases Ledger where the information is recorded.
• The monetary column where the transaction amount is recorded.
• Books of original entry are also known as “journals” or “day books”
• The other book of original entry is simply known as a “journal.”
• The Cash Book is a special book of original entry.
• The names “journal” (synonym for diary) and day book reflects the use of the books for memoranda purposes within the organisation i.e. transactions are recorded on a day to day basis.
• Typically businesses use the following books of original entry:
• The Sales Journal/Sales Day Book -for credit sale transactions
• The Purchases Journal/Purchases Day Book-for credit purchases
• The Returns Outwards Journal (Returns Outwards Day Book)/Purchases Returns Journal(Purchases Returns Day Book)l-for Purchases returns (Returns outwards)
• The Returns Inwards Journal(Returns Inwards Day book)/Sales Returns Journal(Sales Day Book)-to record Sales Returns/Returns Inwards
• Cash Book for cash and bank related payments and receipts
• The Journal which is used for everything else that does not have a day book above.
• After entries have been made in the books of original entry they are then summarised and entered into accounts kept in various corresponding ledgers following the double entry principle.
• Each separate ledger is kept by a different bookkeeper to ease the workload and as a control measure against errors and fraud.

To access more topics go to the Principles of Accounts Notes page.