What type of transactions are recorded in a day book?

The correct answer highlights that day books are primarily used to record day-to-day sales and purchases. These records provide a detailed log of financial transactions as they occur within a business, allowing for real-time tracking of sales and purchases made on credit or in cash.

This is essential for businesses to maintain an accurate and up-to-date record of their operations, as it helps in managing finances and monitoring inventory levels. By summarizing these transactions in the day book, businesses can later transfer this information to ledgers and financial statements, providing a seamless flow of information throughout the accounting system.

Other options, such as long-term asset purchases, transactions involving loans, and annual financial summaries, do not fit within the purpose of a day book. Long-term asset purchases and transactions involving loans are typically recorded in different sections of accounting records, such as fixed asset registers or loan accounts, while annual financial summaries compile data for reporting purposes rather than recording daily activity.