Books of Original Entry

What are Books of Original Entry –

A book of original entry is an accounting book or journal where we record all the business transactions including all the details and descriptions of each transaction along with its source document. It keeps records of all types of transactions like expense voucher, invoices, cash transaction, bank transactions, sale and purchase transactions etc. At the end of the financial year, all the transactions recorded in the books of original entry will be summarized and will be posted to individual ledgers governing the type of transactions. Thereafter the information from general ledger will be used for preparation of financial statements. 

         Some of the examples of books of original entry are Cash journals, Purchase Journals, Sales Journals etc.

Types of Journal

There are two major types of accounting journals, they are: 

1. General Journal: A general journal is an accounting journal in which a business transactions are recorded in chronological order. This is a book of original entry as every transaction is recorded as and when they occur.

For example, if a business makes a sale, all the details of the sale such as the transaction date, amount, description will be recorded in the general journal. A general journal will have the following column items on every page:

a) Date –input the transaction date on this column
b) Particulars – this is where we input the particular accounts to be debited and credited and also the narration or description of the transaction
c) Reference –serial number or tracking number of the source document on this column; this can be sometimes found on the description
d) Debit –the amount to be debited in this column
e) Credit –input the amount to be credited in this column
f) Serial Number – this is to indicate the place of the journal entry in the series

2. Special journal: Special Journals are the special books of original entry where separate journals are prepared for different nature of transactions. After all the transactions are posted in the separate books, then these transactions are transferred to their individual and separate ledgers. Examples of such Journals are –

a) Sales Journal: Used to record the transaction for the sales invoices when the goods have been sold on credit.
b) Purchase Journal: Used to record the transactions of purchases for the organization when the goods have been purchased from the suppliers on a credit basis.
c) Cash Journal or Cashbook: Used to record the payment or receipt done in cash.
d) Sales Return & Purchase Return Journal: Used to record the data of sales return and purchase being returned. Etc.

Books of Original Entry help the organization to record the daily transactions along with the supporting details. It helps to maintain the transactions in chronological order. It helps in removing errors or omissions of the transaction. It helps in tracking the flow of the data from the financial statements to the prime journal books of accounts.