Financial Accounting · Double-entry bookkeeping principles including the maintenance of accounting records

Books of Prime Entry and Day Books Explained

Updated 11 October 2026 · Fact-checked

Books of prime entry are the first place you record transactions from source documents, before posting to the ledgers. They include the sales, purchases and returns day books, the journal and the cash books. Total each book, then post the totals and individual entries to the ledger accounts using double entry.

Understand Books of Prime Entry and Day Books

A business may have hundreds of transactions a day. Writing each one straight into the ledger would be slow and error-prone. So you first record them in a book of prime entry, grouped by type. Prime entry means "first entry".

Each transaction starts with a source document, such as an invoice, credit note or receipt. You list its details in the right book. The day books cover credit transactions only: the sales day book (sales invoices issued), the purchases day book (supplier invoices received), the sales returns day book (credit notes issued to customers) and the purchases returns day book (credit notes received from suppliers).

The cash book records receipts and payments through the bank. The petty cash book records small cash payments. The journal records anything that does not fit elsewhere: opening entries, non-current asset purchases on credit, depreciation, irrecoverable debts, corrections of errors and similar items. Each journal entry shows the debit, the credit and a narrative.

The books of prime entry are not part of double entry itself. The double entry happens when you post them to the ledgers. The ledger is where each account (sales, receivables, payables, expenses) shows its running balance. So the difference is simple: the journal and day books list transactions in date order; the ledger sorts them by account.

In a day book you usually total each column at the end of the period. One posting of the total then updates the ledger, for example total credit sales are debited to the receivables control account and credited to sales. Each customer's individual invoice is also posted to their account in the sales ledger. Where sales tax applies, the day book has a separate tax column.

Key formulas to remember

Sales day book posting: Dr Receivables control account (gross total); Cr Sales (net total); Cr Sales tax (tax total); Individual invoices are also posted to each customer's account in the sales ledger, which is a memorandum ledger outside the double entry when control accounts are used.
Purchases day book posting: Dr Purchases (net total); Dr Sales tax (tax total); Cr Payables control account (gross total); Use the inventory or expense account instead of purchases if the item is not goods for resale.
Sales returns day book posting: Dr Sales returns (net); Dr Sales tax (tax); Cr Receivables control account (gross); Based on credit notes issued to customers.
Purchases returns day book posting: Dr Payables control account (gross); Cr Purchases returns (net); Cr Sales tax (tax); Based on credit notes received from suppliers.
Journal entry layout: Date | Dr Account | Cr Account | Narrative; Total debits must equal total credits in every journal entry.
Gross amount: Gross = Net + Sales tax; Day books show net, tax and gross columns. The gross column equals the sum of the other two.

How to solve Books of Prime Entry and Day Books questions

Use this method for any question on which book records a transaction or how it reaches the ledger.

1Identify the source document: invoice, credit note, receipt, cheque or none.
2Decide whether the transaction is on credit or immediate cash/bank. Credit sales and purchases go to day books. Cash and bank items go to the cash book.
3If it is not a regular sale, purchase, return or cash item, it belongs in the journal.
4Check for sales tax and split the amount into net, tax and gross.
5Work out the double entry: which account is debited, which is credited.
6Total the column if the question gives a day book, then post the total to the control account and the matching income, expense or tax account.
7Check that total debits equal total credits.

Quickest way: Three-question book finder

When to use it: Use on multiple choice questions asking which book a transaction is first recorded in.

Ask: is it a sale or purchase on credit? If yes, the sales or purchases day book.
Ask: is it a credit note? Then the matching returns day book (issued by us is sales returns; received by us is purchases returns).
Ask: is it money in or out of the bank, or small cash? Cash book or petty cash book.
Anything else, such as depreciation, error corrections or an asset bought on credit, is the journal.

Common mistakes in Books of Prime Entry and Day Books

Recording a cash sale in the sales day book.
Students think any sale belongs there.
Fix: The sales day book is for credit sales only. Cash sales go straight to the cash book.
Mixing up sales returns and purchases returns day books.
Both involve credit notes, so they look alike.
Fix: Ask who issued the credit note. If you issued it, sales returns. If you received it, purchases returns.
Posting the gross total to sales.
Students ignore the sales tax column.
Fix: Post net to sales, tax to the sales tax account and gross to the control account.
Saying the journal is the same as the ledger.
Both contain debits and credits.
Fix: The journal is a book of prime entry listing transactions by date. The ledger holds accounts and balances. Posting moves data from one to the other.
Recording a non-current asset bought on credit in the purchases day book.
Students see an invoice and a supplier.
Fix: The purchases day book is for goods for resale or regular expenses. Asset purchases on credit go through the journal.
Writing journal entries with no narrative or with unequal debits and credits.
Rushing in a multi-step question.
Fix: Always check that the two sides are equal and add a short description.

Worked examples

Example 1

A business's sales day book for May shows net sales of $8,000 and sales tax of $1,600. Show the postings to the general ledger.

Show the solution

Gross total = $8,000 + $1,600 = $9,600.
Debit the receivables control account with the gross amount, $9,600.
Credit the sales account with the net amount, $8,000.
Credit the sales tax account with $1,600.
Check: debit $9,600 = credit $8,000 + $1,600 = $9,600.

Answer: Dr Receivables control $9,600; Cr Sales $8,000; Cr Sales tax $1,600.

Example 2

A business buys office equipment on credit from Dale Ltd for $5,000 (no sales tax). Which book of prime entry is used and what is the entry?

Show the solution

The purchase is on credit, but the item is a non-current asset, not goods for resale.
So it is not recorded in the purchases day book. Use the journal.
Debit the office equipment (non-current asset) account with $5,000.
Credit the payables account for Dale Ltd (via the payables control account) with $5,000.
Add a narrative such as: Purchase of office equipment on credit from Dale Ltd.

Answer: Recorded in the journal: Dr Office equipment $5,000; Cr Payables control $5,000.

Exam tips

Multiple choice questions often ask which book a transaction is first recorded in. Use the three-question finder.
In number entry questions on day book totals, check whether the answer needs net, tax or gross.
Remember that credit notes are recorded in returns day books, not as negative entries in sales or purchases day books.
In multiple response questions, read the stated number of answers to select. Eliminate cash items from day book options first.
Check the direction: control account debit for sales, credit for purchases.

Practice questions from Double-entry bookkeeping principles including the maintenance of accounting records

Books of Prime Entry and Day Books: frequently asked questions

What are the books of prime entry?

They are the books where transactions are first recorded from source documents. They are the sales, purchases, sales returns and purchases returns day books, the cash book, the petty cash book and the journal.

What is the difference between the journal and the ledger?

The journal is a book of prime entry that records unusual transactions in date order with a narrative. The ledger holds separate accounts and shows balances. You post journal entries to the ledger.

Are day books part of double entry?

Not on their own. A day book is a list of transactions. Double entry happens when you post the totals to the ledger accounts. The cash book is different, as it can serve as both a book of prime entry and a ledger account.

What goes in the journal?

Items that do not belong in the other books, such as opening entries, credit purchases of non-current assets, depreciation, irrecoverable debts, accruals and error corrections.