Accounting – 2.3 Books of prime entry | e-Consult

A Sales Journal and a Purchase Journal are two crucial books of prime entry used to record specific types of business transactions. Here's how they are used:

Sales Journal

The Sales Journal is used to record all credit sales made by the business. It provides a detailed record of each sale, including:

• Date of the sale: When the sale occurred.
• Customer's name: Who purchased the goods or services.
• Invoice number: A unique identifier for the invoice.
• Description of goods/services sold: What was sold.
• Quantity sold: How many units were sold.
• Price per unit: The cost of each unit.
• Total sales value: The total amount of the sale (quantity x price).
• Credit sales amount: The amount owed by the customer. This is recorded as a credit to the customer's account.

Example: On 15th March, ABC Ltd sold goods to XYZ Company for £500 on credit. This would be recorded in the Sales Journal with the date, XYZ Company's name, an invoice number, a description of the goods, the quantity, the price per unit, and the total sales value of £500.

Purchase Journal

The Purchase Journal is used to record all purchases of goods made by the business on credit. It details:

• Date of the purchase: When the purchase occurred.
• Supplier's name: Who the goods were purchased from.
• Invoice number: A unique identifier for the supplier's invoice.
• Description of goods purchased: What was purchased.
• Quantity purchased: How many units were purchased.
• Price per unit: The cost of each unit.
• Total purchase value: The total amount of the purchase (quantity x price).
• Debtors account: The amount owed to the supplier. This is recorded as a debit to the supplier's account.

Example: On 20th March, DEF Co purchased materials from GHI Supplies for £200 on credit. This would be recorded in the Purchase Journal with the date, GHI Supplies' name, an invoice number, a description of the materials, the quantity, the price per unit, and the total purchase value of £200.