AI Tutor
If a bustling retail store posted all 500 daily credit sales straight into its main ledger accounts, the ledger would become an unreadable mess within a week.
To solve this, businesses use books of prime entry (also called day books or subsidiary journals) as daily sorting records where transactions are first written down before entering the ledger.
How do we know exactly which number from a complex invoice gets written into these books?

Sales and Purchases Day Books

The Sales Day Book records credit sales of goods meant for resale, while the Purchases Day Book records credit purchases of inventory from suppliers.
When an invoice contains a trade discount (an immediate price reduction between traders), you record the amount net of trade discount—never the original list price.
What happens when goods arrive damaged or the customer is sent the wrong color?

Returns Inwards and Outwards Books

The Sales Returns Day Book (or returns inwards book) lists inventory returned by customers, copied directly from the credit notes issued to them.
The Purchases Returns Day Book (or returns outwards book) lists inventory your business sends back to suppliers, copied from credit notes received.