BOOKS OF ORIGINAL ENTRY

They are accounting book or journal where all transactions are initially recorded. All business
transactions are first recorded in the books of original entry. They are also known as the
subsidiary books.- The books are used to reduce the bulk of the work in the ledger.
The books of original entries include:

i) Sales journals/sales daybook

ii) Sales return journals/Return inwards journals/ return inwards daybook

iii) Purchases journals/creditors journals/purchases daybook

iv) Purchases return journals/return outwards journal/ return outwards daybook

v) Cash Book- This book records the cash receipts and cash payments. Its both a ledger
and a book of original entry.
vi) Journal or diary - It is that daybook in which we record the details of any transactions
that cannot be recorded in any other subsidiary book. The main uses of journal are
the following:
a) To record the purchases or sales of assets
b) To correct the errors
c) To record the opening and the closing entries

Sales journal/sales daybook

This book records the details and amounts of all goods sold on credit.
This is used to record credit sales of goods before they can be recorded in their
various ledgers.
The source document is the outgoing invoice or invoice issued by the business.

The overall total in the sales journal is therefore posted in the sales account in the
general ledger on credit side and debtors account in the sales ledger as a debit entry.
It contains the following details:
Date
Particulars/details
Invoice No.
Ledger folio
Amount
It is ruled as follows:
 Date Details Invoice No. Ledger Folio Amount

Example:

The following information relates to Tirop traders for the month of June 2023

June 1: Sold goods to wafula on credit of ksh 200, invoice no 0114

June 2: Sold to the following debtors on credit; Wanjiru ksh 400,Musyoka ksh
300,Wafula ksh 300
June 5: Sold goods on credit to Wanjiru of ksh 300
June 10: Sold goods to the following on credit Kanini ksh 100, Wafula ksh 500,
Wanjiru ksh 600
June 12: Sold goods on credit to musyoka of ksh 350

Required:

Prepare the relevant day book for the above transactions; hence post the various
amounts to their respective individual accounts
Sales journal
Date Details Invoice No. Ledger Folio Amount
1/6/2022 Wafula 0114 SL 1 200
2/6/2022 Wanjiru SL2 400
2/6/2022 Musyoka SL3 300
2/6/2022 Wafula SL4 300
5/6/2022 Wanjiru SL2 300
10/6/2022 Kanini SL5 100
10/6/2022 Wafula SL4 500
10/6/2022 Wanjiru SL2 600
12/6/2022 Musyoka SL3 350
Totals posted to 3050
the Sales
Account (Cr)

Sales Return Journals/Return inwards Daybook

This is for recording the goods that the customers/debtors have returned to the
business.

It uses the information in the credit note issued as a source document to prepare it.
The information is therefore recorded to the return inwards account in the general
ledger, while the individual’s entries are reflected (credited) also in their respective
debtors account for double entry to be completed.

It takes the following format

Date
Particulars/details
Credit note No
Ledger folio
Amount
It is ruled as follows
Date Details Credit Note Ledger Folio Amount
No.

For example;

Record the following transaction for the year 2023 in their relevant daybooks, hence
post them to their respective ledger accounts;
May 1: Goods that had been sold to M. Okondo of shs 2,600 on credit was returned
to the business

May 2: G. Otuya returned good worth shs 1,320 that was sold to him on credit to the
business

May 8: The following returned goods that had been sent to them on credit to the
business H.Wati shs 3,500, Muya shs 4,700, M Okondo shs 2,900

May 12: G Otuya returned goods worth shs 5,400 that were sold on credit to the
business

May 30: Goods worth sh 8,900 that had been sold on credit to G Otuya were
returned to the business
Date Details Credit Note Ledger Folio Amount
1/3/2022 M. Okondo SL 1 2,600
2/5/2022 G.Otuya SL 2 1,320
8/5/2022 H. Wati SL 3 3,500
8/5/2020 Muya SL 4 4,700
8/5/2020 M. Okondo SL 1 2,900
12/5/2020 G Otuya SL 2 5,400
30/5/2020 G Otuya SL 2 8,900
Totals posted to 29,320
return inwards
A/C
(Post the entries to the individual ledger a/c’s (Cr))

Purchases Journal/ Purchases day book

This book records the details and amounts of all goods purchased on credit.

The totals are then debited in the purchases account in the general ledger, while the
individual’s creditors accounts are credited.

It uses the invoices received/incoming invoices as it source document.

It takes the following format;

Date Details Invoice Ledger Folio Amount
Number

For example

The following information relates to Mikwa Traders for the month of April 2023.
Record them in their relevant day’s book, hence post the entries to their relevant
ledger accounts.
April 2023:

April 2 Bought goods worth shs 25 000 on credit from Juma, Invoice no 3502

April 3 Bought goods worth shs 16 500 from kamau on credit, invoice no 2607
April 6 Bought goods worth shs 12 700 from Juma on credit, invoice no 3509

April 8 Purchased goods of shs 25 200 from Juma, invoice no 3605; shs 17 500 from
Kamau, invoice no 3700; shs 45 000 from Wamae wholesalers, invoice no 3750

April 15 Purchased goods of shs 9 200 from Wamae wholesalers on credit, invoice
no 3762

April 18 Bought goods of shs 17 000 from Kamau on credit, invoice no 3802
April 24 Purchased goods of shs 36 000 from Juma on credit, Invoice no 3812
Date Details Invoice Ledger folio Amount
Number
2/4/2020 Juma 3502 PL1 25,000
3/4/2020 Kamau 2607 PL2 16,500
6/4/2020 Juma 3509 PL 1 12,700
8/4/2020 Juma 3605 PL 1 25,200
8/4/2020 Kamau 3700 PL 2 17,500
8/4/2020 Wamae 3750 PL 3 45,000
15/4/2020 Wamae 3762 PL 3 9,200
18/4/2020 Kamau 3802 PL 2 17,000
Totals posted 204,100
to purchases
A/C Dr

Purchases Returns/ Return outwards daybook

This is used to record goods that have been returned to the creditors by the
business, reducing the value of the goods that had been purchased.
It uses the credit note received as the source documents, with the totals being
recorded in the purchases return account while the individual creditor’s accounts
are debited in their respective ledger accounts.

It takes the following format

Date Details Credit Note Ledger Folio Amount

For example:

Record the following transaction in the purchases return day book for Njiru’s
traders for the month of June 2023, hence post the information into their relevant
ledger accounts.

June 2023;

June 3: Returned goods worth shs 400 that had been bought from Nairobi stores,
credit note no 56

June 8: Returned goods of shs 1 200 to Matayos store, Credit note No. 148
June 19: Had some of their purchases returned to the following: Njoka enterprises
shs 700, credit note no 205, Nairobi Stores shs 600, credit note no 58, Matayos store
shs 1 000 credit note no 191

June 26: Returned goods worth shs 1 800 to Njoka enterprise credit note no 210

June 30: Returned goods worth shs 1 020 to Matayos store, credit note no 200
Date Details Credit Note Ledger Folio Amount
3/6/2020 Nairobi Stores 56 PL 1 400
8/6/2020 Matayos store 148 PL 2 1,200
19/6/2020 Njoka 205 PL 3 700
enterprises
19/6/2020 Nairobi stores 58 PL 1 600
19/6/2020 Matayos store 191 PL 2 1,000
26/6/2020 Njoka 210 PL 3 1,800
enterprises
30/6/2020 Matayos store 200 PL 3 1,020
Totals to be 6,720
posted to
Return
outwards
account

JOURNAL
The transactions which cannot be recorded to the other books of original entry are recorded first
in the journal and then these are posted into the ledger.
For every journal a brief description is given which is known as narration. After every journal
entry a line is drawn.
The main uses of journal are the following:
a) To record the purchases or sales of assets
b) To correct the errors
c) To record the opening and the closing entries

Example:
Purchase of assets
Record the following transactions by journal entries:
15th March 2023 The purchase of a Motorvan on credit from Simba Motors for shs.
4,000,000
20th March 2023 The purchase of Machinery from AB & Co. for shs 50,000
21St March 2023 The purchase of office table from Furniture Ltd Shs 150,000

Date Details Folio Dr. Cr.

15th March 2022 Motor Van 4,000,000
Simba Motors 4,000,000
Being Motor van
bought on credit
from Simba Motors
20th March 2022 Machinery 5,0000
AB & Co. 5,0,000
Being Machinery
bought from AB &
Co.

Cashbook ( to be covered as a topic after the double entry concept.