book of prime entry

Bank Payments Daybook (records supplier & non supplier payments) The books of prime entry are where transactions are first recorded.

It would be possible to record every business transaction directly into the ledger, but the volume would be very great; therefore, most businesses keep subsidiary books, or books of prime entry as they are called, and post only the totals periodically to the appropriate account in the ledger.

In addition to the basic six books of prime entry a petty cash book is also kept to avoid having to enter petty or small cash payments into the main cash book and this is discussed in more detail later in the chapter (see Fig. 5.6(f)).

The journal is a book of prime entry used to record transactions which do not pass through the cash receipts or payments books, or purchases, sales or returns day books, for example, purchases and sales of fixed assets on credit, the correction of errors and other entries of an extraordinary nature.