Books of Prime Entry

Transactions are first recorded in the books of prime entry. These books are also called day books. The bookkeeper maintains these books of companies. Invoices and credit notes are posted in books of prime entry. The accounts department is responsible for the custody of day books because all important information and records of vendors and customers are there. In the past day books were just registers for recording sales, purchases, inventory, and cash position of companies. Nowadays, there are different tools used for recording like Excel sheets, Google Sheets, and other accounting software, etc.

The main books of prime entry are as follows.

The Sales Day Book is used to record credit sales and credit notes. It includes all invoices sent to customers. It is a very useful tool for businesses to analyze the revenue generated over the period.

Sale Day Book

Date	Invoice	Customer	Jeans Pants	Dress Pants	Total Sales
Jan 20	100	Amir	55	45	100
	101	Rasheed	60	30	90
	102	Hira	70	10	80

The Purchase Day Book is used to record credit purchases from vendors. When businesses purchase inventory on a credit basis they need to credit how much they owe to vendors all this information is recorded in the purchase day book.

Purchase Day Book

It is important to know that there is no invoice number in the purchase day book. We cannot record invoice numbers that pertain to other organizations.

The Cash Book is the most important document for any organization. The cash book records all the money the business receives and spends. All the money received in the form of cash, coins, and cheques is also recorded in a cash book and subsequently, this money is deposited into the company bank account.

Date	Description	Account Payables	Account Receivables	Petty cash	Utility Bills	Total
01 Jan 2026						1000
02 Jan 2026	Account payable- Akram	120				880
10 Jan 2026	Account receivable		200			1080
12 Jan 2026	Gas Bill				50	1030
14 Jan 2026	Petty Cash			400		630
15 Jan 2026	Electricity Bill				50	580
31 Jan 2026	Balance c/d					580

The cash book and bank statement need to be reconciled weekly or monthly basis. The closing balance of the cash book should agree with the bank statement closing balance. Any difference should be investigated.

A separate cash book is maintained for meeting the daily miscellaneous expenses of the business is called a petty cash book. Most of the organizations keep petty cash at office premises. The petty cash is kept under an imprest system which means it is replenished up to a certain amount after one month. The petty cash is always considered risky. Therefore, when someone claims expenses under the petty cash system. The petty cash voucher needs to be complete in all aspects. Any claim supported by authentic evidence.

The Sales Returns Day Book is used for recording sales returns only. When the customer goods due to any reason, credit notes are raised. All the credit notes are posted in the sales returns day book. Where a business has relatively lower sale returns, it can record a credit note as a negative number in the sale day book.

Conversely, the Purchase Returns Day Book is used to record any goods or services returned to suppliers due to any reason. All credit notes received from suppliers are posted in the sale returns day book.

The Journal is used for recording unusual accounting entries. For example, the recording of asset depreciation or when accounting errors need reversal. In the journal, every transaction has a dual side debit and credit. The format of a journal is as follows:

Date	Particulars	Debit	Credit
	Telephone Bill Account	1500
	Cash Account		1500
	Telephone bill paid on cash