Books of Prime Entry Record Transactional Source Documents

Steps:

• Define books of prime entry as initial journals (e.g., sales, purchases, returns) for recording source documents like invoices and credit notes.
• Classify credit note: entered in returns journal as it adjusts sales/purchases.
• Classify debit note: not a standard source document; used for internal adjustments, not posted directly to prime entry.
• Classify invoice: entered in sales or purchase journal as primary transaction record; statement of account: summary report, not a transactional source.

Why D is correct:

• Debit notes and statements of account lack transactional detail for direct prime entry posting, per accounting standards on source documents.

Why the others are wrong:

• A: Credit notes and invoices are both entered in returns and sales/purchase journals.
• B: Credit notes are entered in returns journals.
• C: Invoices are entered in sales/purchase journals.

Final answer: D