What are the Books Of Prime Entry ?

What are books of prime entry?

        Books of prime entry are books that are to be maintained to record transactions as and when they occur, so that we do not forget any transactions or post them twice. Books of prime are also known as special purpose subsidiary books or books of original entry.

These are some of the main subsidiary books:-

-         Cash book

-         Petty cash book

-         Purchase day book

-         Sales day book

-         Purchase return day book

-         Sales return day book

-         Journal proper

What is a cash book?

        Cash book is the book in which all the transactions related to cash are recorded. It also records bank transactions related to the business. It records all the money received and paid from the business.

Pro forma

Receipts			Payments
Date	Narrative (particulars)	Amount	Date	Narrative (particulars)	Amount

 

What is a petty cash book?

        A petty cash book is a book for all the small transactions like postage, stamps, stationary etc.

          Petty cash book uses a system called imprest system, where a fixed amount of money called ‘float’ is kept, from which the petty cashier makes small payments and also receives payments on behalf of the main cashier. The float gets reimbursed (refunded) every time it gets over.

Pro forma

Receipts	Date	Narrative	Total	(Total column is classified into individual expenses)

 

What is a purchase day book?

        Purchase day book is the book in which all the credit purchases of a business are recorded. (All cash purchases are recorded in the cash book)

Pro forma

Date	Name of supplier (account to be credited)	Invoice No	Ledger folio	Details	Total amount

 

What is a sales day book?

        Sales day book is the book in which credit sales of a business are recorded. (All cash sales are recorded in the cash book).

Pro forma

Date	Name of customer (account to be debited)	Invoice No	Ledger folio	Details	Total amount

 

What is a purchase return day book?

          This is a book used to record all the returns of a credit purchase made by the business. This book is also known as Return Outward book.

There are many reasons for returning goods to suppliers.

For example:-

-         When goods delivered are not the ones ordered

-         When quality of good are not good

-         When goods are not delivered on time

Pro forma

Date	Name of supplier (account to be debited)	Invoice No	Ledger folio	Details	Total amount

 

If a business has very few purchase returns, they might record it as a negative entry in the purchase day book.

What is a sales return day book?

          A sales return day book is a book used to record the goods returned by customers which were sold for credit.

Pro forma

Date	Name of customers (account to be credited)	Invoice No	Ledger folio	Details	Total amount

 

When businesses have very few sales returns, it may be recorded as negative entry in the sales day book.

What is a journal proper?

          A journal is a record kept to record all the other transactions which are not recorded in the other books of prime entry. All non routine transactions are recorded in this book.

A narrative explanation is compulsory for all the transactions entered in the journal proper. Corrections of errors are also done by posting a correct entry in the journal.

Pro forma

Date	Narrative (particulars)	Ledger folio	Amount Dr	Amount Cr

 

While posting entries in the journal proper, we need to keep the rules and principles of Double entry system in our mind.

Conclusion

          The business need not maintain all these records (books of prime entry). It needs to maintain only the ones the business requires the most.

These days the books of prime entry are maintained on the computer. But the rules and principles of both manual and computerised books remain the same.

 

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