Double-entry bookkeeping 2: books of prime entry, accounting systems
. The sales returns day book is the book of prime entry for sales.

. Sales returns mean reductions in revenue, VAT and trade receivables or cash.

. The sales returns day book is part of the double entry system.

. Jay Limited's sales returns day book for May shows the total value of sales returns as £10,500 including VAT of £1,750. All of Jay Limited's sales are made on credit to customers. The correct double entry to record the sales returns in May is: debit trade receivables £10,500, credit VAT £1,750, credit sales £8,750.