A5 Books of Original Entry
Books of original entry are documents used to log all transactions at the point they are made. They are later to be transferred to a ledger during a bookkeeping process. Books of original entry help a business to keep track of their everyday expenses. The information recorded on each transaction may include
date
supplier or customer
details of the transaction
invoice numbers
A sales day book is a manual ledger used to record credit sales to customers. Businesses that have relationships with their customers where they allow credit sales set up an account for each customer. A salesperson would record each sale in the daybook to be collated at the end of each day. The information recorded about each sale in the daybook includes customer name, invoice date, invoice number and the invoice amount.
Sales returns day book records any details of good returned or orders cancelled by customers. Records of returned are collated and credit notes issued. Credit notes can cancel the requirement to pay an invoice or if the invoice has already been paid, customers can use it for future payments or request a refund.
Purchases day books are used to record all purchases made throughout the day in the operations of a business. Summaries of purchases recorded in the daybook are added to the general ledger at the end of a specified trading period. This is to avoid overwhelming the general ledger with large quantities of transactions when there are many purchases made each day. The information included in the purchases day book includes the transaction date, supplier invoice number, details of the purchase and invoice amount.
Purchase returns daybooks are used to record all returns that a business makes to a supplier that has been bought on credit. This may be due to faulty or damaged goods or to cancel an order before it arrives. Suppliers will issue a credit note which can be matched against and cancel the relevant invoice for the purchase.
General journals are used to record transactions not recorded in the other daybooks. These may include sales or returns of non-current assets, depreciation, interest receipts and payments, share capital and bad debt (money that is not collectable).
NOTE: the journal should include the purchase and disposal of non-current assets, depreciation and irrecoverable debts only (i.e. not the recording of errors).