Difference Between Primary And Secondary Books of Accounts

The difference between Primary Books of Accounts (Books of Prime Entry) and Secondary Books of Accounts (Books of Secondary Entry) is that Primary Books are Books of Original Entries or Books of Prime Entries to record Business Transactions Chronologically (Date-Wise) from Voucher while Secondary Books of Accounts are Books of Final Entries where Accounts are Finally recorded separately i.e., in a classified form, to show closing balances to be transferred to Trial Balance at end of the accounting period.

Examples of Primary Books of Accounts are Cash Book, Sales Day Book, Purchases Day Book, etc while Secondary Books of Accounts include Cash Book, Purchases Account, Sales Account, Capital Account, etc.

Another name for Journal is Primary Books of Accounts, Books of Original Entry or Books of Prime Entry while secondary Books of Accounts is another name for Ledger which is also called Books of Final Entry or Principal Books of Accounts because all the accounts whether temporary or permanent accounts are finalized or updated here separately in a classified form. Also it is the based for the preparation of Trial balance and 4 major Financial Statements (Income Statement, Balance Sheet, Statement of Retained Earnings And Cash Flows Statement).