Books of prime entry
Also known as: books of original entry, day books, subsidiary books
Books of prime entry are the day books where a business first records transactions, grouped by type, before they are posted to the general ledger. Examples include the sales day book, purchases day book, cash book, and the journal.
Books of prime entry — also called books of original entry — sit between source documents and the general ledger. Rather than posting every invoice and receipt straight into ledger accounts, a business lists similar transactions in a dedicated day book first, then transfers periodic totals to the ledger. This keeps the ledger uncluttered and creates a clear audit trail back to the underlying document.
The standard set includes the sales day book (credit sales, from sales invoices), the purchases day book (credit purchases, from supplier invoices), the sales and purchases returns day books (from credit notes), the cash book (receipts and payments through the bank), the petty cash book (small cash payments, often on an imprest system), and the journal — a catch-all for entries that fit nowhere else, such as opening balances, corrections of errors, depreciation charges, and year-end adjustments.
A worked example shows the flow: a credit sale of £2,000 generates a sales invoice, which is listed in the sales day book. At the end of the period the day book total is debited to receivables and credited to sales revenue in the general ledger, while individual customer balances are updated in the receivables ledger. Because entries are batched, only a handful of postings reach the general ledger instead of hundreds.
Note that the cash book has a dual role: it is both a book of prime entry and part of the double-entry system itself, since it doubles as the bank ledger account. The ACCA Financial Accounting (FA) exam expects you to identify which day book a given transaction belongs in, know which source document feeds it, and trace a transaction from document through day book to the general ledger.
Key takeaways
- Books of prime entry are where transactions are first recorded, before posting to the general ledger.
- The main ones are the sales, purchases, and returns day books, the cash book, the petty cash book, and the journal.
- Each day book is fed by a specific source document — invoices, credit notes, receipts, or paying-in slips.
- Totals are posted periodically to the general ledger, which reduces the volume of ledger entries.
- The cash book is unusual in being both a book of prime entry and a ledger account in its own right.