Our POA Tuition Topic 4: Books of Prime Entry, Books of Prime Entry are books in which business transactions are first recorded before they are posted to the ledgers.
Barangay Council for the Protection of Children (BCPC) Orientation.pptx
POA Tuition
1.
2. Books of Prime Entry
are books in which
business transactions are
first recorded before
they are posted to the
ledgers.
3. A journal is a book of accounting entries where transactions are recorded
chronologically. The journal is also called a ‘day book’, a ‘book of prime entry’ or a
‘book of original entry’.
4. What are
the types
of books
of prime
entry /
books of
original
entry?
Special Journals
Purchases Journal – records all credit
purchases of goods meant for resale.
(Source documents used: invoices
received)
Sales Journal – for recording sales of
goods on credit. (Source documents
used: invoices, sales invoices)
Returns Outwards Journal / Purchases
Returns Journal – for recording returns
of goods previously purchased on
credit. (Source documents used: Credit
notes received)
Returns Inwards Journal – for
recording returns of goods previously
sold on credit (Source documents
used: Credit notes sent)
5.
6. For recording:
1. Opening entries
2. Closing entries
3. Sale and purchase of fixed asset on credit
4. Correction of errors, adjusting entries, and others not recorded
in other books of prime entry.
8. What are the
advantages of
using special
journals?
Similar transactions are
recorded into one book in
order of date (e.g. credit
sales of goods only into
the Sales Journal and so
on).
Unnecessary detail in the
ledger is cut down as only
totals are posted to the
ledger.
Use of special journals
provides an important
middle step between
source documents and
the ledger accounts