Scribd
Upload
7 views

Week 2 Reading Material

The document outlines the process of recording financial transactions in books of prime entry, including sales, sales returns, purchases, and purchase returns. It details the steps for documenting credit sales and purchases, as well as how to handle returns with credit notes. Each section emphasizes the importance of maintaining accurate records in journals before posting to the ledger accounts.

Uploaded by

mahdy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
7 views

Week 2 Reading Material

The document outlines the process of recording financial transactions in books of prime entry, including sales, sales returns, purchases, and purchase returns. It details the steps for documenting credit sales and purchases, as well as how to handle returns with credit notes. Each section emphasizes the importance of maintaining accurate records in journals before posting to the ledger accounts.

Uploaded by

mahdy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 18

Borcelle

Week 2

Books of
Prime entry
Journal
Book of prime entry
A book to used to list all transactions of a similiar nature before they are
posted in the ledger,
Books of prime entry :
Financial sales journal
sales return journal
transaction
purchase journal
record in book of purchase return
prime entry journal
cash book
post to ledger journal
account

it shows that there is a additional step betweern the financial transaction and
the ledger account

02
Sales
When a business makes a credit sale, an invoice is issued to the customer. This invoice serves as
confirmation of the goods or services provided by the business. It also specifies the amount owed
by the customer and the payment deadline.

Once the invoice is issued, the transaction is recorded in the sales journal, which is used to
document all credit sales made by the business. This ensures that every credit sale is properly
tracked and accounted for in the company’s records.

1. When goods are sold on credit


Enter the date, customer name and the invoice total in the sales journal.
Debit the customer’s account in the sales ledger with the invoice total.
2. At the end of the month
Credit the sales account in the nominal ledger with the sales journal total.
This will now form the double entry for all the individual debit entries in the sales ledger.

02
Sales Return
When a credit sale is returned, a credit note is issued to the customer. This document
specifies the amount of the return and deducts it from the amount owed by the customer.

Once the credit note is issued, the return is recorded in the sales returns journal,
which is the book of prime entry used to document all goods returned by credit
customers.

1. When goods are returned by a credit customer


Enter the date, customer name and credit note total in the sales returns journal.
Credit the customer’s account in the sales ledger with the credit note total.
2. At the end of the month/week
Debit the sales returns account in the nominal ledger with the sales returns journal
total.
This will now form the double entry for all the individual credit entries in the sales
ledger.

02
02
02
02
Sales journal

Sales Return

02
Purchase
When a purchase is made on credit, an invoice is received from the supplier. This invoice serves as
confirmation of the goods or services provided and specifies the amount owed by the business
along with the payment deadline.

All invoices received from suppliers are recorded in the purchases journal, which is the book of
prime entry used to document all credit purchases.

1.When goods are purchased on credit


Enter the date, supplier name and the invoice total in the purchases journal.
Credit the supplier’s account in the purchases ledger with the invoice total.
2.At the end of the month
Debit the purchases account in the nominal ledger with the purchases journal total.
This will now form the double entry for all the individual credit entries in the
purchases ledger.

02
Purchase Return
When a purchase is made on credit, an invoice is received from the supplier. This invoice serves as
confirmation of the goods or services provided and specifies the amount owed by the business
along with the payment deadline.

All invoices received from suppliers are recorded in the purchases journal, which is the book of
prime entry used to document all credit purchases.

1. When goods are returned to a credit supplier


Enter the date, supplier name and the credit note total in the purchases returns journal.
Debit the supplier’s account in the purchases ledger with the credit note total.
2. At the end of the month
Credit the purchases returns account in the nominal ledger with the purchases returns journal total.
This will now form the double entry for all the individual debit entries in the purchases ledger.

02
03
03
03
03
Thank You

+6281977110102 [email protected]

You might also like