What is a Book of Prime Entry and what is recorded in each of the different day books? Flashcards
What is a Book of Prime Entry?
A book that records a great number of transactions on a daily basis. These include credit sales, credit purchases, cash sales, purchases, expenses and other day-to-day transactions.
What is recorded in the Sales day book?
Sales invoices for credit sales.
What is recorded in the Purchases day book?
Purchases invoices for credit purchases.
What is recorded in the Sales returns day book?
Records credit notes for credit sales returned by customers.
What is recorded in the Purchase returns day book?
Credit notes for credit purchases returned to suppliers.
What is recorded in the Discounts allowed day book?
Discounts allowed on a conditional basis such as Prompt Payment discounts.
What is recorded in the Discounts received day book?
Discounts received on a conditional basis such as Prompt Payment discounts.
What is the difference between Discounts allowed and Discounts received?
Discounts allowed affect the sales of a business while Discounts received affect purchases made by a business.
What is recorded in the cash book?
Cash receipts (cash received from a cash sale or a receivable, which is known as a Sales Ledger Control Account or SLCA for short) and Cash payments (cash paid towards a cash purchase or to a payable, which is known as a Purchase Ledger Control Account or PLCA for short). It can also form part of the double-entry system.
What is recorded in the Petty Cash book?
Small cash payments, which are itemised in the Petty Cash book.
