What is prime entry?

Dear COYETE,

Basically Prime Entry is the entry which is made in the books of prime entry, this is the very first/initial entry passed by an entity in its records after the occurance of an event, like if sales has been made then this entry is made in Sales Journal which is a book of prime entry, now first you need to understand about books of prime entry,

There are three books of prime entry

1)Purchase Day Book or Purchase Journal
2)Sales Day Book or Sales Journal
3)Cash Book or Cash Journal


Prime Entry Books/Books Of Prime Entry:-

Prime Entry means starter or intiaitive/initial entry, you can understand them as they are like a drum which has several outlets once you put a mixture in a drum then this drum according to pre defined rules distribute the mixture for example 20% of the input should go in Outlet '1' 50% in Outlet 'B' and 30% in OutLet 'C'....

For example if an Entity sold goods on account to a customer then the event of sale is occured now the entity must enter this in a sales journal/day books, this is the start of accounting for sale of goods to customer now from sales journal this entry will flow towards,
1)Sales Ledgers/Debtors' Ledger(Accounts Of Individual Customers)
2)General Ledger------->Sales A/C
------------------------------>Recievables Control Account

If For Example Mr 'A' sold Goods Amounting $10,000 to Customer 'X' then this Mr 'A' will enter this sale in his sales journal/day book as $10,000 this sales day book in computerised system will transfer this $10,000 automatically, in Individual Customer Account of 'X' as $10,000, in General Ledger as $10,000 in Sales Account, in General Ledger as $10,000 in Recieavables Control Account...

Same phnemina will apply in Cash Journal and Purchase Journal...

I hope this helps you,

Regards,

Muhammad Amir