Which statement accurately describes which documents are books of original entry?

Which statement accurately describes which documents are books of original entry?

• A. The Cash Receipts Journal, the Cash Disbursements Journal, and the General Journal are books of original entry, but the General Ledger is not.
• B. The General Ledger is also a book of original entry.
• C. All four items are books of original entry.
• D. The General Journal is not a book of original entry.

Answer: (B)

In accounting, the first place a transaction is recorded is a book of original entry, also called a journal. The typical journals used here are the Cash Receipts Journal (for cash received), the Cash Disbursements Journal (for cash paid), and the General Journal (for all other entries, including adjustments and non-cash items). These are the original records created at the time of the transaction. The General Ledger is different: it’s the collection of all individual accounts and shows the posting from the journals, with running balances. It serves as the basis for preparing trial balances and financial statements, rather than recording the transactions for the first time. So the correct description is that the Cash Receipts Journal, the Cash Disbursements Journal, and the General Journal are books of original entry, while the General Ledger is not.

In accounting, the first place a transaction is recorded is a book of original entry, also called a journal. The typical journals used here are the Cash Receipts Journal (for cash received), the Cash Disbursements Journal (for cash paid), and the General Journal (for all other entries, including adjustments and non-cash items). These are the original records created at the time of the transaction.

The General Ledger is different: it’s the collection of all individual accounts and shows the posting from the journals, with running balances. It serves as the basis for preparing trial balances and financial statements, rather than recording the transactions for the first time.

So the correct description is that the Cash Receipts Journal, the Cash Disbursements Journal, and the General Journal are books of original entry, while the General Ledger is not.