These record on a daily basis every transaction that a business makes. The books are often referred to as "journals" e.g. The Purchases Journal. They record the details of the transaction, the amount of money involved and the date of the transaction. Each transaction will have a folio number. Do you want to see an example?
There are seven books of original entry:
The Purchases Day Book This records all purchases made by a company.
The Sales Day Book This records all sales made by a company
The Purchases Returns Book This records all items purchased by a company and subsequently returned to the seller.
The Sales Returns Book This records all items sold by a company which were subsequently returned by the buyer.
The Journal Proper This records rarer items such as the purchase of capital items.
The Cash Book This records cash and cheques both issued and received.
The Petty Cash Book This records all items purchased using money from the petty cash account.
Where do the books of original entry fit into a basic accounting system?
The "Day Books" or "Journals" form the first tier of the system. They record each financial transaction from the source documents.
Source Documents
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Purchases Returns Book | Purchases Day Book | Sales Day Book | Sales Returns Book | Journal Proper | Cash Book: Cash in / Cash out Cheques in / Cheques Out | Petty Cash Book |
What happens to these records then? They are transferred onto the most important books in the accounting system: The "ledgers". There are three ledgers and the cash book:
The Creditors' Ledger | The Debtors' Ledger | The Cash Book | The General Ledger |
All of the ledgers contain "accounts". These "accounts", just like bank accounts are either in credit or in debt.
Before you look at these ledgers in more detail we suggest you look at how these accounts are laid out, which column is which, and how they are balanced off.
Source:
http://www.bized.co.uk
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