Books of prime entry

Question 1

What is a book of prime entry?

Answer 1

It is where the transactions made by a business are recorded for the first time, before they are entered into separate ledger accounts.

Question 2

What is the purpose of a book of prime entry?

Answer 2

To collect and summarise information from a variety of source documents.

Helps to save time and reduce the risk of errors.

Question 3

What are the books of prime entry?

Answer 3

Sales journal
Sales return journal
Purchases journal
Purchases return journal
Main cash book
General journal

Question 4

What does a sales journal do?

Answer 4

Lists credit sale transactions.

Question 5

What does a sales returns journal do?

Answer 5

Shows goods previously sold on credit that have now been returned.

Question 6

What does a purchases journal do?

Answer 6

Lists credit purchase transactions.

Question 7

What does a purchases returns journal do?

Answer 7

Shows goods returned to the supplier.

Question 8

What does the main cash book do?

Answer 8

Records cash and bank transactions.

Question 9

What does the general journal do?

Answer 9

Lists unusual transactions which aren’t recorded in any of the other books of prime entry.