Financial Accounting · Sales and purchases

Books of Prime Entry: Day Books Explained for ACCA Financial Accounting

Updated 11 October 2026 · Fact-checked

Day books are books of prime entry where you first list credit sales, credit purchases and their returns, using invoices and credit notes. You total each book, then post the totals to control accounts and the individual lines to customer or supplier accounts. Day books are not part of double entry themselves.

Understand Books of Prime Entry: Day Books

A book of prime entry is where a transaction is first recorded, before it reaches the ledgers. Businesses have too many transactions to write each one straight into the ledger. So they list similar transactions together first.

The four day books cover credit transactions only:
- Sales day book: credit sales, from sales invoices issued.
- Purchases day book: credit purchases, from purchase invoices received.
- Sales returns day book: goods customers send back, from credit notes issued.
- Purchases returns day book: goods you send back to suppliers, from credit notes received.

A day book lists the date, the customer or supplier, the invoice or credit note number, the net amount, any sales tax and the gross total. At the end of a period you add up each column. The gross total is the amount owed by customers or to suppliers.

A day book is a list, not a ledger account. The ledgers are where double entry happens. You post the totals to the general ledger and each individual line to the customer's account in the receivables ledger or the supplier's account in the payables ledger.

The difference between a day book and a ledger is simple. A day book gives a chronological summary of one type of transaction. A ledger groups transactions by account, so you can see the balance on each account. Cash sales and cash purchases do not go in the day books. They go in the cash book.

Key formulas to remember

Sales day book posting: Dr Receivables control account (gross total); Cr Sales (net total); Cr Sales tax (tax total); The individual invoice gross amounts are also debited to each customer's account in the receivables ledger.
Purchases day book posting: Dr Purchases (net total); Dr Sales tax (tax total); Cr Payables control account (gross total); Each supplier's account in the payables ledger is credited with the gross invoice amount.
Sales returns day book posting: Dr Sales returns (net total); Dr Sales tax (tax total); Cr Receivables control account (gross total); Each customer's account is credited with the gross credit note.
Purchases returns day book posting: Dr Payables control account (gross total); Cr Purchases returns (net total); Cr Sales tax (tax total); Each supplier's account is debited with the gross credit note.
Gross amount: Gross = Net + Sales tax; Sales tax is a percentage of the net amount. At 20%, tax = net × 20%.

How to solve Books of Prime Entry: Day Books questions

Use this method for any question on day books, whether it asks for totals, postings or the effect of an error.

1Identify which day book the document belongs to. Invoice issued: sales. Invoice received: purchases. Credit note issued: sales returns. Credit note received: purchases returns.
2Check it is a credit transaction. Cash or bank items go in the cash book, not a day book.
3Separate net, sales tax and gross for each line. If only gross is given, work back to net by dividing by (1 + tax rate).
4Total the net, tax and gross columns. Check that net plus tax equals gross.
5Post the totals to the general ledger. Apply the debit and credit rules for that day book.
6Post each line to the individual customer or supplier account for the gross amount.
7Check your answer. The individual accounts should add up to the control account balance.

Quickest way: Four-book debit and credit shortcut

When to use it: Use this for multiple choice questions asking which account is debited or credited from a day book total.

Ask: does the transaction increase or decrease what customers owe, or what we owe suppliers?
Sales increase receivables, so debit receivables. Sales returns reduce receivables, so credit receivables.
Purchases increase payables, so credit payables. Purchases returns reduce payables, so debit payables.
The other side is the income or expense account (sales, purchases or their returns), and sales tax takes the balance.
Check that total debits equal total credits before you choose an answer.

Common mistakes in Books of Prime Entry: Day Books

Recording cash sales in the sales day book.
Students think the sales day book holds all sales.
Fix: Day books hold credit transactions only. Cash sales go straight to the cash book.
Posting the net amount to the receivables or payables control account.
Students forget that customers and suppliers owe or are owed the gross amount including sales tax.
Fix: Always post the gross total to the control account and the net and tax to their own accounts.
Posting a returns day book the wrong way round.
Students copy the sales or purchases entry without reversing it.
Fix: Returns reverse the original entry. Sales returns credit receivables. Purchases returns debit payables.
Treating day books as part of double entry.
They look like ledger accounts because they have columns and totals.
Fix: Day books are only lists. Double entry happens when you post to the ledgers.
Posting the day book total to the individual customer accounts.
Students confuse control accounts with individual accounts.
Fix: Post the total to the control account, and each line to its own customer or supplier account.
Adding sales tax to a gross figure that already includes it.
Students do not read whether the amount is stated net or gross.
Fix: Underline whether the figure is net or gross. If gross at 20% tax, net = gross ÷ 1.2.

Worked examples

Example 1

A business with 20% sales tax has these credit sales for the month: invoice 1 to Arden, net $1,000; invoice 2 to Brook, net $2,500; invoice 3 to Clay, net $1,500. Calculate the totals for the sales day book and state the ledger entries.

Show the solution

Net total = 1,000 + 2,500 + 1,500 = $5,000.
Sales tax = 5,000 × 20% = $1,000.
Gross total = 5,000 + 1,000 = $6,000.
Check the gross by customer: Arden 1,200; Brook 3,000; Clay 1,800. Total = 6,000.
General ledger: Dr Receivables control $6,000; Cr Sales $5,000; Cr Sales tax $1,000.
Receivables ledger: debit Arden $1,200, Brook $3,000 and Clay $1,800.

Answer: Net $5,000, sales tax $1,000, gross $6,000. Dr Receivables control $6,000; Cr Sales $5,000; Cr Sales tax $1,000.

Example 2

The purchases returns day book for a month shows credit notes received with a gross total of $2,400, which includes sales tax at 20%. Which entries are made in the general ledger?

Show the solution

Gross = $2,400, which is net × 1.2.
Net = 2,400 ÷ 1.2 = $2,000.
Sales tax = 2,400 − 2,000 = $400.
Purchases returns reduce what we owe suppliers, so debit the payables control account with the gross $2,400.
Credit Purchases returns with the net $2,000.
Credit Sales tax with $400. Check: debit 2,400 = credit 2,000 + 400.

Answer: Dr Payables control $2,400; Cr Purchases returns $2,000; Cr Sales tax $400.

Exam tips

Read each question for the words 'credit', 'invoice' and 'credit note'. They tell you which day book applies.
In multiple response questions, select exactly the number of options asked. Eliminate any option that places a cash transaction in a day book.
In number entry questions, check whether you need the net, tax or gross figure before you type.
Remember the control account always takes the gross figure. This is a common trap in answer options.
If a question says a day book total was posted wrongly, work out the effect on the control account and the individual accounts separately.

Practice questions from Sales and purchases

Books of Prime Entry: Day Books in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Books of Prime Entry: Day Books: frequently asked questions

What is the difference between a day book and a ledger?

A day book is a book of prime entry. It lists one type of credit transaction in date order. A ledger groups entries by account and shows a balance. Double entry happens in the ledgers, not in the day books.

Which transactions go in the sales day book?

Only credit sales go in, recorded from sales invoices issued. Cash sales go in the cash book. Returns from customers go in the sales returns day book.

How do you post day books to ledger accounts?

Post the totals to the general ledger accounts: control account, sales or purchases, and sales tax. Then post each line to the customer or supplier account in the receivables or payables ledger. This keeps the control account equal to the sum of the individual accounts.

Are day books part of double entry bookkeeping?

No. They are only lists used to summarise transactions. The double entry takes place when the totals are posted to the general ledger.