Why is the sales day book referred to as the book of prime entry?

The sales day book is referred to as the book of prime entry because it serves as the initial point of recording all sales transactions, specifically those that involve sales made on credit. Invoices issued to customers are first recorded in this book before any further processing occurs in the accounting system. This process allows businesses to maintain an organized record of sales activity, which is crucial for tracking sales performance and managing receivables.

The term "prime entry" highlights the significance of this book as the first step in the accounting cycle where financial data is entered. By capturing detailed information about each sale, such as the customer name, date, and amount, the sales day book ensures that all transactions are accurately logged, thus aiding in error prevention and ensuring that financial statements reflect true operational performance.