Which term best describes the book of original entry in accounting?

• A. Book of original entry; process of entering transactions into a journal; important for chronological order
• B. A ledger
• C. A trial balance
• D. An audit report

Answer: (B)

The key idea is how recording flows in double-entry accounting: the book of original entry is where transactions are recorded for the first time. This is the journal, which notes each transaction in date order with a brief description and the debits and credits involved. After entries are made in the journal, they are posted to the ledger, which is a collection of all the individual accounts. The ledger shows the running balances for each account and is what you use to prepare the trial balance and financial statements. So the ledger serves as the book of final entry, while the journal is the book of original entry.