I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

PART C: THE USE OF DOUBLE-ENTRY AND ACCOUNTING SYSTEMS 

 

50

 

The sales day book is used to keep a list of all invoices sent out to customers each day. An extract from 

a sales day book might look like this.  

 

 

 

 

SALES DAY BOOK 

 

Date 

 

Invoice 

 

Customer 

Total amount 

invoiced 

 

 

 

$ 

Jan 10 20X0 

247 

Jones & Co 

 

105.00 

 

248 

Smith Co 

 

86.40 

 

249 

Alex & Co 

 

31.80 

 

250 

Enor College 

 

1,264.60 

 

 

 

 

1,487.80 

Most businesses 'analyse' their sales. For example, this business sells boots and shoes. The sale to 

Smith was entirely boots, the sale to Alex was entirely shoes, and the other two sales were a mixture of 

both. 

Then the sales day book might look like this. 

SALES DAY BOOK 

  

 

Total 

amount 

 

 

Date Invoice 

Customer 

invoiced

 

Boot sales 

Shoe sales 

 

 

 

$ 

$   

$ 

Jan 10 20X0 

247 

Jones & Co 

 

105.00 

 

60.00 

 

45.00 

 

248 

Smith Co 

 

86.40 

 

86.40 

 

 

249 

Alex & Co 

 

31.80 

 

 

31.80 

 

250 

Enor College 

 

1,264.60 

 

800.30 

 

464.30 

 

 

 

 

1,487.80 

 

946.70 

 

541.10 

The analysis gives the managers of the business useful information which helps them to decide how 

best to run the business. 

Most accounting software allows you to raise sales invoices, and automatically generate sales day book 

reports of the invoices raised. 

3.2 The purchase day book 

A business also keeps a record in the purchase day book of all the invoices it receives. 

The 

purchase day book

 is the book of prime entry for credit purchases. 

 

An extract from a purchase day book might look like this. 

PURCHASE DAY BOOK 

    

Total 

 

  

 

Internal inv 

Supplier 

 

amount 

 

 

Electricity 

Date no. 

inv. 

no. 

Supplier 

invoiced 

Purchases 

etc 

 

 

 

 

$      

$   

$ 

Mar 15 

654 

YH000939 

Cook & Co 

 

315.00 

 

315.00 

 

20X0 

655 A00167 

W 

Butler 

 

29.40 

 

29.40 

 

 

656 1267  EEB 

 

116.80 

 

 

116.80 

 

657 GB17789 

Show 

Fair 

Co 

 

100.00 

 

100.00 

      

           

  

 

 

 

 

 

561.20 

 

444.40 

 

116.80 

The purchase day book records other people's invoices, which have all sorts of different numbers. For 

ease of reference, the business may assign its own sequential internal invoice number to each purchase 

invoice. 

Like the sales day book, the purchase day book analyses the invoices which have been sent in. In this 

example, three of the invoices related to goods which the business intends to resell (called simply 

'purchases') and the other invoice was an electricity bill. 

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CHAPTER 4  

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  SOURCES, RECORDS AND BOOKS OF PRIME ENTRY 

 

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Most accounting software allows you to enter details of the purchase invoices onto the system, and 

automatically generate Purchases Day Book reports of the invoices entered. 

3.3 The sales returns day book 

When customers return goods for some reason, a credit note is raised. All credit notes are recorded in 

the sales returns day book. An extract from the sales returns day book follows. 

SALES RETURNS DAY BOOK 

Date 

Credit note 

Customer and goods 

Amount 

  

 

$ 

30 April 20X8  CR008 

Owen Plenty 

 

 

 

Three pairs 'Texas' boots 

135.00 

The 

sales returns day book

 is the book of prime entry for credit notes raised. 

 

Not all sales returns day books analyse what goods were returned, but it makes sense to keep as 

complete a record as possible. Where a business has very few sales returns, it may record a credit note 

as a negative entry in the sales day book. 

3.4 The purchase returns day book 

Not surprisingly, the purchase returns day book records credit notes received in respect of goods which 

the business sends back to its suppliers.  

An extract from the purchase returns day book follows. 

PURCHASE RETURNS DAY BOOK 

Date Supplier 

and 

goods 

Amount 

  

$ 

29 April 20X8 

Boxes Co 

 

 

300 cardboard boxes 

46.60 

 

The 

purchase returns day book

 is the book of prime entry for credit notes received from suppliers. 

 

Once again, a business with very few purchase returns may record a credit note received as a negative 

entry in the purchase day book. 

 

4

   Cash book 

The cash book may be a manual record or a computer file. It records all transactions that go through the 

bank account.  

4.1 The cash book 

The cash book is also a day book, used to keep a record of money received and money paid out by the 

business. The cash book deals with money paid into and out of the business bank account. This could 

be money received on the business premises in notes, coins and cheques, subsequently paid into the 

bank. There are also receipts and payments made by bank transfer, standing order, direct debit and 

bank interest and charges, directly by the bank. 

Some cash, in notes and coins, is usually kept on the business premises in order to make occasional 

payments for odd items of expense. This cash is usually accounted for separately in a petty cash book. 

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