Book of original entry

Definition

A book of original entry is a journal where all business transactions are initially recorded. It serves as the primary source of information for subsequent posting to ledgers.

5 Must Know Facts For Your Next Test

1. It is the first place where transactions are recorded in chronological order.
2. Common types include sales journals, purchase journals, and cash receipts journals.
3. Transactions in the book of original entry must be supported by source documents like invoices and receipts.
4. Entries recorded here are later posted to individual accounts in the general ledger.
5. Accuracy in this book is crucial as errors can lead to incorrect financial statements.

Related terms

General Ledger:

A collection of all accounts used by a company, summarizing transactions from books of original entry.

Journal Entry:

A record that captures specific details about financial transactions within a journal or book of original entry.

T-Account: A visual representation using two columns to show debits on the left and credits on the right for each account.