Accounting – 2.3 Books of prime entry | e-Consult

The sales journal is a book of prime entry used to record details of all credit sales made by a business. Its primary purpose is to provide a detailed record of each sale, including customer details, invoice numbers, and the amount sold. It helps in tracking sales performance, identifying slow-moving items, and preparing the statement of sales.

Process of Recording Transactions in the Sales Journal:

• Each credit sale is recorded in the sales journal. The date of the sale, the customer's name, the invoice number, and the amount sold are recorded.
• The sales journal is usually organized by date.
• The information from the sales journal is then transferred to the general ledger. The sales journal is posted to the sales account in the general ledger, which is a credit account. This increases the balance of the sales account.

The purchases journal is a book of prime entry used to record details of all purchases made by a business on credit. Its purpose is to provide a detailed record of each purchase, including supplier details, invoice numbers, and the amount purchased. It helps in tracking purchase costs, identifying potential suppliers, and preparing the statement of purchases.

Process of Recording Transactions in the Purchases Journal:

• Each credit purchase is recorded in the purchases journal. The date of the purchase, the supplier's name, the invoice number, and the amount purchased are recorded.
• The purchases journal is usually organized by date.
• The information from the purchases journal is then transferred to the general ledger. The purchases journal is posted to the purchases account in the general ledger, which is a debit account. This increases the balance of the purchases account.