What are the books of prime entry?

The books of prime entry are where transactions are first listed before they are posted to the ledgers. They are the sales journal, the purchases journal, the returns inwards and returns outwards journals, the general journal, and the cash book. Each source document leads to one book of prime entry, which is later totalled and posted to the ledger accounts. This keeps the ledger uncluttered and groups similar transactions together.

Which source document is used for each transaction?

A credit sale uses a sales invoice; a credit purchase uses a purchase invoice; goods returned use a credit note; cash received uses a receipt; and a payment by cheque uses the cheque counterfoil (the stub in the chequebook). Each document is the proof of the transaction and tells you the figures to record in the matching book of prime entry.

What is a two-column cash book?

A two-column cash book records both cash and bank in one book, with a cash column and a bank column on each side. Receipts go on the debit (left) side and payments on the credit (right) side. It often also has memorandum discount columns: discount allowed on the debit side and discount received on the credit side, which are totalled and posted separately. The cash book is both a book of prime entry and the ledger account for cash and bank.

What are the three ledgers?

The sales ledger (debtors ledger) holds an account for each credit customer; the purchases ledger (creditors ledger) holds an account for each credit supplier; and the general ledger holds all other accounts, including sales, purchases, expenses, assets and capital. Dividing the ledger this way keeps customer and supplier records separate and easy to manage.

How are journal totals posted to the ledgers?

The total of the sales journal is posted to the credit of the sales account in the general ledger, while each customer is debited individually in the sales ledger. The total of the purchases journal is posted to the debit of the purchases account, while each supplier is credited individually in the purchases ledger. Posting the total once and the individuals separately is what makes the double entry agree.

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Books of prime entry and ledgers: N(A)-Level Principles of Accounts (SEAB 7086), covering source documents, the journals and day books, the two-column cash book, and posting from the books of prime entry to the sales, purchases and general ledgers

An N(A)-Level Principles of Accounts (SEAB 7086) overview of books of prime entry and ledgers: the source documents that prove each transaction, the sales, purchases, returns and general journals, the two-column cash book with discount columns, and how journal totals and individual entries are posted to the three ledgers.

Generated by Claude Opus 4.86 min readSEAB-7086Updated 2026-06-13

Reviewed by: AI editorial process; not yet individually human-reviewed

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What this module trains
From documents to journals
The cash book
Posting to the ledgers
Check your knowledge

What this module trains

Real businesses do not post every transaction straight into the ledger. They first prove it with a document, list it in a book of prime entry, then post it to the ledgers in an orderly way. N(A)-Level Principles of Accounts (SEAB 7086) tests this flow directly: name the document, choose the right book, write up the cash book, and post the totals correctly. This module follows the paper trail from the source document to the ledger account.

This guide links the four dot points of the module, each with its own page and practice. The subject hub is at /sg-n-level/accounting and the syllabus index at /sg-n-level/accounting/syllabus.

From documents to journals

The source documents dot point identifies the invoice, credit note, receipt and cheque counterfoil, and states which book of prime entry each one leads to. The journals and day books dot point shows how to write up the sales, purchases and returns journals from those documents, and how to use the general journal for items that do not fit the others, such as opening entries and the correction of errors.

The cash book

The cash book dot point shows how the two-column cash book records cash and bank together, with receipts on the debit side and payments on the credit side, and how the discount allowed and discount received columns are used and posted. Remember that the cash book doubles as the ledger account for cash and bank, so its balance is the cash and bank figure.

Posting to the ledgers

The posting to the ledgers dot point explains the three ledgers and the rule for posting totals and individual entries.

Writing up the sales journal and posting it

step 1: list the credit sales

Three credit sales in May: 3 May to Tan $\text{S\textdollar}400$ ; 7 May to Lim $\text{S\textdollar}250$ ; 12 May to Ng $\text{S\textdollar}350$ . Enter each in the sales journal with its date and name.

step 2: total the journal

Total $= \text{S\textdollar}400 + \text{S\textdollar}250 + \text{S\textdollar}350 = \text{S\textdollar}1{,}000$ .

step 3: post the total to the general ledger

Post the total $\text{S\textdollar}1{,}000$ to the credit side of the sales account in the general ledger. This is one entry for the whole month.

step 4: post the individuals to the sales ledger

Debit each customer in the sales ledger: Tan $\text{S\textdollar}400$ , Lim $\text{S\textdollar}250$ , Ng $\text{S\textdollar}350$ . The individual debits ( $\text{S\textdollar}1{,}000$ in total) match the single credit to sales, so the double entry agrees.

This module follows the paper trail in N(A)-Level Principles of Accounts (SEAB 7086) from documents to ledgers. Each source document (sales invoice, purchase invoice, credit note, receipt, cheque counterfoil) leads to a book of prime entry: the sales, purchases and returns journals, the general journal, and the cash book. The two-column cash book records cash and bank together, receipts on the debit side and payments on the credit side, with discount allowed and discount received columns. Journals are totalled and posted: the sales journal total to the credit of sales (general ledger) with each customer debited in the sales ledger, and the purchases journal total to the debit of purchases with each supplier credited in the purchases ledger. The three ledgers are the sales (debtors) ledger, the purchases (creditors) ledger and the general ledger.

Check your knowledge

A mix of recall and application questions across the module. Work each fully, then check against the solutions.

State the source document used for: (a) a credit sale; (b) goods returned by a customer; (c) a payment by cheque. (3 marks)
Name the book of prime entry used for credit purchases. (1 mark)
State which ledger holds: (a) a credit customer; (b) the rent account; (c) a credit supplier. (3 marks)
On which side of the cash book are payments recorded? (1 mark)
The sales journal total for the month is $\text{S\textdollar}2{,}300$ . State the full double entry for posting it. (3 marks)
Explain why the discount allowed column is on the debit side of the cash book. (2 marks)

Solutions

Q1: (a) Sales invoice. (b) Credit note (issued to the customer). (c) Cheque counterfoil (the stub in the chequebook).
Q2: The purchases journal (purchases day book).
Q3: (a) The sales ledger (debtors ledger). (b) The general ledger. (c) The purchases ledger (creditors ledger).
Q4: Payments are recorded on the credit (right) side; receipts are on the debit (left) side.
Q5: Credit the sales account in the general ledger with the total $\text{S\textdollar}2{,}300$ (one entry), and debit each customer individually in the sales ledger, the individual debits adding to $\text{S\textdollar}2{,}300$ .
Q6: Discount allowed is given to customers who pay promptly. It is a cost (an expense) to the business, recorded as a memorandum on the receipts (debit) side beside the cash received, and its total is later posted to the debit of the discount allowed account.

Sources & how we know this

Principles of Accounts (Syllabus 7086) — Singapore Examinations and Assessment Board (2026)