A daybook (also called a subsidiary book or book of prime entry) is used to record transactions of a particular type before they are posted to the ledger accounts. The sales daybook is the book of prime entry specifically for recording sales.
Sales daybooks record only credit sales of stock, that is, goods sold to customers on account rather than for immediate cash. Each entry is normally taken from a sales invoice issued to the customer and later posted to the individual customer's account in the sales ledger and, in total, to the sales account. Cash sales of stock are recorded in the cash book, since money changes hands immediately and no debtor is created. Sales of fixed assets, whether for cash or on credit, are not recorded in the sales daybook at all, because the sales daybook is reserved for the trading stock the business normally deals in, not for disposals of assets such as vehicles, machinery, or equipment.
Because the sales daybook is limited to credit transactions in trading stock, the correct description is credit sales of stock.
Examination tip: remember the daybook and its ledger destination together, the sales daybook feeds the debtors' individual accounts and the sales account, and it never contains cash transactions or fixed-asset disposals.
