Books of Original Entry

The books of accounts where in transactions are recorded for the first time from a source document are called Books of
Original Entry. A document which provides evidence of the transactions is called a source document or voucher, for e.g.
cash memo, invoice, sales bills, pay-in-slips, cheques, salary slips, debit notes, credit notes, receipts etc.
When the size of the business is small then all its transactions can be recorded in a single journal. But as the size of the
business grows, it no longer remains possible to record all the transactions in a single journal. In such a situation more than
one journal may be used - each such journal is called a sub-journal.
A particular type of transaction may be recorded in a sub-journal, or subsidiary book, for e.g., all credit purchases of goods
may be recorded in one journal called the purchases book and all credit sales of goods may be recorded in another subjournal called sales day book. These journals are called as Special purpose subsidiary books or books of original entry.
The important types of subsidiary books are Sales Book, Purchases Book, Purchases Return Book, Sales Return Book,
Cash Book and Journal Proper. These books are called books of original entry because transactions are first of all recorded
in these books. An enterprise need not maintain all of the above books - it may maintain any of the above books, according
to its needs and requirements.
The commonly used books of original entry are:
Sales Day Book (or Sales Journal) for credit sales.
Purchases Day Book (or Purchases Journal) for credit purchases.
Sales Returns Day Book (or Returns Inwards Journal) for returns inwards.
Purchases Returns Day Book (or Returns Outwards Journal) for returns outwards.
Cash Book for receipts and payments of cash and cheques.
General Journal (or Journal if the term Day Book is used for the other books of original entry) for other items.
Types of ledgers
The different types of ledgers most businesses use are:
Sales Ledger: This is for customers personal accounts.
Purchases Ledger: This is for suppliers personal accounts.
General Ledger: This contains the remaining double entry accounts, such as those relating to expenses, fixed
assets, and capital.
Types of accounts
Some people describe all accounts as personal accounts or as impersonal accounts.
Personal Accounts these are for debtors and creditors (i.e. customers and suppliers).
Impersonal Accounts divided between real accounts and nominal accounts:
Real Accounts accounts in which possessions are recorded. Examples are buildings, machinery, fixtures and
stock.
Nominal Accounts accounts in which expenses, income and capital are recorded.

A diagram of the books commonly used

1. Sales Book.
The credit sales of goods to customers are recorded in this book. When the number of transactions relating to credit sales of
goods is very large, for recording such transactions a special journal called Sales Book/Sales Day Book/Sales Journal may
be used by the enterprise. In this journal only credit sales of goods is recorded. The format of the Sales Book is given below.
Dat
e

Particulars

Invoice No.

L.F.

Details OMR

Amount OMR

Illustration 1: Enter the following transactions in the sales book of M/s Amal Electricals and post the same in ledger.
2006
Dec.12 Sold on credit to Rahman
20 Water Heaters @ OMR 10 each
10 Electric Kettles @ OMR 4 each
Trade discount 5%.
Dec. 18 Sold on credit to Rashid
10 Toasters @ OMR 5 each
20 Water heaters @ OMR 12 each
Trade discount 10%.
Dec. 25 Sold on credit to Rahma
25 Electric Irons @ OMR 4 each
Trade discount 5%
Dat
e

Particulars

Invoice No.

L.F.

Details OMR

Amount OMR

Ledger Posting from the Sales Book

The total of the sales book is credited to the sales account by writing Credit Sales for the month in the particulars column
and the accounts of the individual debtors / customers are debited by writing Sales A/c in their respective accounts.

Sales Ledger (Customers Account)

General Leger

Purchase Book
All credit purchases of goods are recorded in this book. Which is also called as Purchases Journal or Purchase day Book.
When the number of credit transactions pertaining to purchases of merchandise or goods are very large than the business
may use a subsidiary book to record such transactions and such a subsidiary book is called the purchases book. The
source documents for recording transactions in this book are the invoices on the bills received by the firm from the
suppliers.
Illustration 10. Prepare Purchases Book of M/s Anood Electrical for Dec. 2006.
2006
Dec. 5 Purchased on credit from Iman & Co.
20 Water heaters @ OMR 8 each,
10 Electric kettle @ OMR 3 each.
Trade discount 10%.
Dec. 10 Purchased on credit from Kadija
20 Water heaters @ OMR 5 each,
10 Toasters @ OMR 3.500 each.
Trade discount 15%.
Dec. 25 Purchased on credit from Omar
20 Electric Irons @ OMR 2.500 each,
25 Toasters @ OMR 4 each.
Dat
e

Particulars

Invoice No.

L.F.

Details OMR

Amount OMR

Posting from the Purchases Book

The total of the purchases book is periodically posted to the debit of the purchases account by writing Credit Purchases for
the month in the particulars column and the accounts of the individual suppliers are credited by writing Purchases Account
in the particulars column.

Purchases Ledger (Supplier Account)

General Leger

Sales Return Book:

Sometimes goods sold are returned to the customers. This may be done because the goods are not of the required quality,
or as per the specifications of the sample sent to the customer, or are defective etc. The return of such goods by the
customer is recorded in the sales returns book. When the goods are returned, a credit note is prepared in which the details
of the goods returned are mentioned. The credit note is sent to the customer. On the basis of the information given in the
credit note the customer makes necessary entries in his books.
The format of the purchases returns journal is similar to the purchases book as given below.
Dat Particulars
Credit Note No L.F.
Details OMR
e

Amount OMR

Posting from Sales Returns (Returns Inwards) Day Book

Purchases Return Book:

Sometimes goods purchased are returned to the suppliers. This may be done because the goods are not of the required
quality, or as per the specifications of the sample sent by the supplier, or are defective etc. The return of such goods to the
suppliers is recorded in the purchases returns book. When the goods are returned, a debit note is prepared in which the
details of the goods returned are mentioned. The debit note is sent to the supplier. On the basis of the information given in
the debit note the supplier makes necessary entries in his books.
The format of the purchases returns journal is similar to the purchases book as given below.
Dat Particulars
Debit Note No L.F.
Details OMR
e

Posting from Purchases Returns (Returns Outwards) Day Book

Amount OMR

REVIEW QUESTIONS:
Q1. Enter up the Sales Day Book from the following details. Post the items to the relevant accounts in the Sales Ledger and
then show the transfer to the sales account in the General Ledger.
2008
Mar 1 Credit sales to Hilalah OMR 600
3 Credit sales to Sara OMR 320
5 Credit sales to Osama OMR 400
7 Credit sales to Azzan OMR 200
16 Credit sales to Kawthar OMR 500
23 Credit sales to Sara OMR 180
30 Credit sales to Hilalah OMR 400
Q2. Lulu Hyper Market of Suwaiq, Oman, is selling the following items at the recommended retail prices as shown: TV @
OMR 300 each, Fridge @ OMR 150, Washing Machine @OMR 100, Microwave Oven @ OMR 50. He makes the following
sales:
2007
May 1 To Faiza, Tharmad, Oman: 3 TVs, 5 Fridges, 1 Washing Machine. Less 25 per cent trade discount.
10 To Ali, Tatiff, Oman: 6 Fridges, 5 Microwave Ovens. Less 331/3 per cent trade discount.
15 To Entisar, Barka, Oman: 5 TVs. No trade discount.
28 To Mahmood, Bidaya, Oman: 10 Washing Machines, 6 Microwave Oven, 3 Fridges, 8 Tvs. Less 25 per cent trade
discount.
You are to require to
(a) Enter them up in the Sales Day Book and post to the personal accounts, and
(b) Transfer the total to the sales account in the General Ledger.
Q3. A Jack has the following purchases for the month of May 2008:
2008
May 1 From Khamis: 4 DVDs at OMR 6 each, 3 mini hi-fi units at OMR 20 each. Less 25 per cent trade discount.
3 From Fahad: 2 washing machines at OMR 120 each, 5 vacuum cleaners at OMR 30 each, 2 dishwashers at OMR 100
each. Less 20 per cent trade discount.
15 From Ahmed: 1 hi-fi unit at OMR 30, 2 washing machines at OMR 220 each. Less 25 per cent trade discount.
20 From Waleed: 6 CD/radios at OMR 45 each. Less 331/3 per cent trade discount.
30 From Rahim: 4 dishwashers at OMR 80 each. Less 20 per cent trade discount.
Required:
(a) Enter up the purchases day book for the month.
(b) Post the transactions to the suppliers accounts.
(c) Transfer the total to the purchases account.

Q4. You are to enter up the Purchases Day Book and the Returns Outwards Day Book from the following details, then to
post the items to the relevant accounts in the Purchases Ledger and to show the transfers to the General Ledger at the end
of the month.
2007
May 1 Credit purchase from White OMR 324.
4 Credit purchases from the following: Red OMR 216; Blue OMR 322; Black OMR 64; Green OMR 130.
7 Goods returned by us to the following: White OMR 56; Red OMR 28.
10 Credit purchase from Blue OMR 140.
18 Credit purchases from the following: White OMR 230; Red OMR 310; Yellow OMR 405; Green OMR 180.
25 Goods returned by us to the following: Yellow OMR 140; Blue OMR 34.
31 Credit purchases from: Black OMR 174; Blue OMR 230.
Q5. Enter up the Sales Day Book and the Returns Inwards Day Book from the following details. Then post to the customers
accounts and show the transfers to the General Ledger.
2008
June 1 Credit sales to: A OMR 240; B OMR 126; G OMR 94; F OMR 107.
6 Credit sales to: P OMR 182; L OMR 203; T OMR 99.
10 Goods returned to us by: A OMR 19; F OMR 32.
20 Credit sales to B OMR 1,790.
24 Goods returned to us by L OMR 16.
30 Credit sales to T OMR 302.
Q6. You are to enter up the sales, purchases, returns inwards and returns outwards day books from the following details,
then to post the items to the relevant accounts in the sales and purchase ledgers. The total of the day books are then to be
transferred to the accounts in the General Ledger.
20X9
May 1 Credit sales: T Thompson OMR 56; L Rodriguez OMR 148; K Barton OMR 145.
3 Credit purchases: P Potter OMR 144; H Harris OMR 25; B Spencer OMR 76.
7 Credit sales: K Kelly OMR 89; N Mendes OMR 78; N Lee OMR 257.
9 Credit purchases: B Perkins OMR 24; H Harris OMR 58; H Miles OMR 123.
11 Goods returned by us to: P Potter OMR 12; B Spencer OMR 22.
14 Goods returned to us by: T Thompson OMR 5; K Barton OMR 11; K Kelly OMR 14.
17 Credit purchases: H Harris OMR 54; B Perkins OMR 65; L Nixon OMR 75.
20 Goods returned by us to B Spencer OMR 14.
24 Credit sales: K Mohammed OMR 57; K Kelly OMR 65; O Green OMR 112.
28 Goods returned to us by N Mendes OMR 24.
31 Credit sales: N Lee OMR 55.
Q7. You are to enter the following items in the books, post to personal accounts, and show the transfers to the General
Ledger.
20X9
July 1 Credit purchases from: K Hill OMR 380; M Norman OMR 500; N Senior OMR 106.
3 Credit sales to: E Rigby OMR 510; E Phillips OMR 246; F Thompson OMR 356.
5 Credit purchases from: R Morton OMR 200; J Cook OMR 180; D Edwards OMR 410; C Davies OMR 66.
8 Credit sales to: A Green OMR 307; H George OMR 250; J Ferguson OMR 185.
12 Returns outwards to: M Norman OMR 30; N Senior OMR 16.
14 Returns inwards from: E Phillips OMR 18; F Thompson OMR 22.
20 Credit sales to: E Phillips OMR 188; F Powell OMR 310; E Lee OMR 420.
24 Credit purchases from: C Ferguson OMR 550; K Ennevor OMR 900.
31 Returns inwards from: E Phillips OMR 27; E Rigby OMR 30.
31 Returns outwards to: J Cook OMR 13; C Davies OMR 11.