Question

Which of the followings is not a book of original entry?

• A. Cash book
• B. Ledger
• C. Sales journal
• D. Bill receivable book

Answer 1

Answer: (B)

Ledger

Books of original entry refers to the accounting journal in which business transactions are initially recorded. The information in these books is the summarized into a general ledger, from which financial statements are produced. Each accounting journal contains detailed records for the types of accounting transactions pertaining to a specific area. Examples of these accounting journals are:

(i) Cash journal

(ii) General journal

(iii) Purchase book

(iv) Sales book

(v) Cash book

The general ledger is not considered a book of original entry, if it contains summarized entries posted to it from one of the underlying accounting journals. However, if transactions are recorded directly into the general ledger, it can be considered one of the books of original entry. Books of original entry are extremely useful for investigating individual accounting transactions, and are commonly accesses by auditors, who verify a selection of business transactions to ensure that they were recorded correctly.