Route transactions through books of prime entry
Use source documents and the correct journal or cash book before posting totals to ledger accounts.
Section 1.2 · The accounting system
Cambridge International AS & A Level Accounting 9706, 2026–2028 syllabus, Version 2. These lessons cover Topic 1.2 only. The 2029 syllabus has a separate document and is not mapped here. Practice is self-checked, not an official Cambridge grade; timed-paper practice and human subject-teacher review remain outstanding.
Before you begin
- Topic 1.1 introduces business forms and finance. In these lessons, keep each transaction tied to its source evidence and record both sides of its effect.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
A customer pays an invoice by bank transfer. Which book records the receipt?
What you will learn
- Match credit sales and purchases to their journals
- Distinguish returns journals from ordinary sales and purchases
- Explain the role of the general journal and cash book
Source documents support the first record
Invoices, credit notes, receipts and bank evidence support what happened and when. Books of prime entry organise transactions before the information is posted to ledger accounts.
A credit sale is first recorded in the sales journal; a credit purchase in the purchases journal. A sales return goes in the sales returns journal; a purchase return in the purchases returns journal. These records keep the type and direction of the transaction clear.
Use the cash book and general journal for their purposes
The cash book records money received and paid through cash or bank. A general journal records selected transactions that do not belong in the routine books, such as correcting entries or opening entries when appropriate.
A journal is not a substitute for evidence. Check the document, customer or supplier, date, amount and nature of the transaction before posting.
Pause and explain
A business buys goods on credit from a supplier. What is the correct first-entry book?
Worked example
A retailer receives a supplier invoice for goods bought on credit, then returns part of them and receives a credit note. Name the first-entry records.
Show the worked solution
- The original credit purchase is recorded in the purchases journal.
- The returned goods and credit note are recorded in the purchases returns journal.
- The credit note reduces the amount owed to the supplier when posted.
Answer Record the invoice in the purchases journal and the supplier's credit note in the purchases returns journal; the return reduces the payable.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
Classify a $160 customer credit note for goods returned and name the source evidence.
Give me a hint
Identify who returned the goods and what document confirms the adjustment.
Compare my reasoning
- The customer returned goods, reducing the original sale.
- The sales returns journal records the return.
- The credit note supports the amount and customer account.
Record the $160 return in the sales returns journal using the credit note as evidence.
Look for these in your work
- Customer return identified
- Correct journal named
- Supporting evidence named
A company has a $900 cash sale and a $1,300 credit sale today. Which books of prime entry record the transactions?
Give me a hint
Separate immediate receipt from credit.
Compare my reasoning
- The $900 cash sale involves money received and belongs in the cash book.
- The $1,300 credit sale is first recorded in the sales journal.
- Do not enter the credit sale as a bank receipt before payment.
Record the $900 receipt in the cash book and the $1,300 credit sale in the sales journal.
Look for these in your work
- Cash sale routed
- Credit sale routed
- No premature receipt
A purchase invoice is for $720, but the business paid $500 today and will pay the rest later. Explain how the transaction is first recorded and what the payment record changes.
Give me a hint
Separate the purchase from the later settlement amount.
Compare my reasoning
- The purchase invoice records the $720 credit purchase in the purchases journal.
- The $500 paid is recorded in the cash book.
- After posting, the remaining supplier payable is $220.
Record the full $720 purchase in the purchases journal, then the $500 payment in the cash book. The supplier account remains payable $220.
Look for these in your work
- Full purchase recorded
- Partial payment separated
- Remaining payable calculated
Common mistakes
- Recording a credit purchase in the cash book before payment
- Using the sales returns journal for goods returned to a supplier
- Posting a supplier credit note as a new cash receipt
What can you explain now?
Which book records a credit note for goods returned by a customer?
Compare with the explanation
Sales returns journal
It records returns that reduce the original sales transaction.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
Which first-entry book records a credit sale, and which records the customer's later bank payment?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.