TOPIC 5:
BOOKS OF PRIME ENTRY (JOURNALS)
Accounting Cycle
Journalising Posting
Source Trial
Transaction Journals Ledgers
Documents Balance
YES
Adjustments
NO
Financial Statements
2
SOURCE DOCUMENTS
• Invoices
• Utility bills
• Cash receipt
• Payment voucher
• Cash register slip
• Cheque
• Cheque butt
• Debit note
• Credit note
Invoice No: A00456
INVOICE
KST SDN BHD
Persiaran Niaga 2
Ipoh, Perak
Date: 2 June 20x7
PJH Enterprise
Lakeville 8, Bandar Universiti
Seri Iskandar, Perak
No. Item Quantity Amount
1 Sport shoes - Ababas 10 5,000
2 Sport shoes - Phuma 15 7,200
Total 12,200
RECEIPT
PAYMENT VOUCHER
Types of Journals/books of prime entry:
1) Purchases journal – TO RECORD ALL CREDIT PURCHASE
2) Sales journal- TO RECORD ALL CREDIT SALES
3) Cash receipt journal- TO RECORD ALL CASH/ CHEQUE RECEIPT
4) Cash payment journal- TO RECORD ALL CASH/ CHEQUE
PAYMENT
5) Sales return journal – TO CREDIT SALES RETURN
6) Purchase return journal – TO RECORD PURCHASE RETURN
7) General journal - TO RECORD OTHER THAN ABOVE
General Journal
• Uses of GENERAL JOURNAL:
1)Record sales or purchase of non-current assets on credit
2)Record withdrawal of goods/inventory for personal use
3)Record opening entries
4)Record correction of errors
5)Record end of period adjustments
Purchases Journal
• For each credit purchase, the buying firm will receive a
document from the supplier; invoice.
• The buyer of the goods will refer this document as purchase
invoice.
• From the purchase invoice purchases journal
• The information in the creditors column of the purchases journal
will be posted to individual creditors’ subsidiary ledger.
Purchases Journal
• Function & source documents?
• To record goods purchased on credit only
• Invoice received from supplier
For example:
1 Jan 2019 Purchase goods on credit RM200 from Amir
Purchase Journal
Date Particular [Link] Folio/Ref Amount (RM)
2019 Amir 200
1 Jan
Transferred to Purchases account
SALES JOURNAL
• Companies record sales on merchandise on account/on credit.
• Cash sales of merchandise cash receipts journal.
• Credit sales of assets other than merchandise
general journal
SALES JOURNAL
• Function and source documents?
• To record credit sales only
• Invoice sent to ARC
For example:
2 Jan 2019 Sold goods to Ahmad on credit worth RM100
Sales Journal
Date Particular [Link] Folio/Ref Amount (RM)
2019 Ahmad 100
2 Jan
Transferred to Sales account
Cash receipt journal
• Companies record all receipts of cash.
• The most common types of cash receipts:
• Cash sales of merchandise
• Collection of accounts receivables
• Other possibilities:
• Receipt of money from bank loans
• Cash proceeds from disposal of equipment
Cash receipt journal
• Function & source documents?
• To record all cash received only from any sources
• The most common is the receipt and cash register summary
For example:
6 Jan 2019 Cash sales RM 30
Cash Receipt Journal
Date Particular Folio/Ref Discount Cash Bank (RM)
No Allowed (RM) (RM)
2019 Sales 30
6 Jan
Cash payment journal
• Or cash disbursement journal
• Companies record all disbursement of cash.
• Entries are made from pre-numbered cheque.
Cash payment journal
• Function & source documents?
• To record all outflow of cash only from the business for any
purpose
For example:
7 Jan 2019 Purchase goods RM 70. Paid by cheque
Cash Payment Journal
Date Particular Folio/Ref Discount Cash Bank (RM)
No Received (RM) (RM)
2019 Purchase 70
7 Jan
Sales return Journal
• Where goods are returned by the customer to the business,
the business will issue a document known as a credit note to
the customer.
• Customer’s liability is reduced
• Or return inward journal
Sales return journal
• Function & source documents?
• To record transactions involving goods returned by a
customer
• A credit note issued to a customer
For example:
3 Jan 2019 Ahmad return goods RM50 to the business
Sales Return Journal
Date Particular Inv no/credit Reference Amount (RM)
note/debit note
2019 Ahmad 50
3 Jan
Transferred to return inward account
Purchase return journal
• When goods are returned by a business to its supplier, a
document called a credit note will be sent by the supplier
to the business.
• Indicates liability of a business to the supplier has been
reduced accordingly.
• Also known as return outward journal
Purchase return journal
• Function & source documents?
• To record transactions involving goods returned to
supplier.
• A credit note sent by the supplier.
For example:
4 Jan 2019 Business return goods to Amir worth RM 70
Purchases Return Journal
Date Particular Inc no/credit Reference Amount (RM)
note/debit note
2019 Amir 70
4 Jan
Transferred to Purchase Return account
General Journal
• Uses of GJ
• Record sales or purchase of non-current assets on
credit
• Record withdrawal of goods/inventory for personal use
• Record opening entries
• Record correction of errors
• Record end of period adjustments
General Journal
For example:
1 Jan 2019 Owner brought motor vehicle RM 50,000 into the business
General Journal
Date Particular Folio Debit (RM) Credit
(RM)
2019 Motor vehicle 50,000
1 Jan
Capital 50,000
Owner brought motor vehicle into the business
Illustration on Journal
Date Transactions Journal
2018 Amin Enterprise started the business selling books and deposited CRJ
1 Jan cash in bank RM 50000.
1 Feb Purchase furniture and issued a cheque of RM 2600 for payment. CPJ
12 Jun Purchase fixture and fittings from Faiz, RM 1000 and promised to GJ
pay later.
15 Oct Paid the amount owed to Faiz by issuing a cheque, RM 500. CPJ
15 Jan Purchased goods on credit from Abu RM 500 PJ
13 Feb Purchase stocks RM 200 by cash. CPJ
22 Jun Sold goods on credit to Ahmad RM 150 SJ
5 Jul Ahmad paid amount owed by cheque. CRJ
10 Jul Sold goods RM 120 by cash. CRJ
25 Oct Paid electricity bill RM 70 by cash CPJ
21 Nov Received dividend RM 15 by cash CRJ
1 Dec Owner took cash RM 50 for personal use. CPJ
