What is referred to as the Book of Original Entry?

The term "Book of Original Entry" specifically refers to the journal in accounting. The journal is where transactions are initially recorded in chronological order before they are transferred to the general ledger. This process is fundamental because it ensures that all financial activities are documented efficiently and accurately from the very beginning of their reporting process.

In terms of accounting practices, each transaction is recorded in the journal with sufficient detail, allowing for clear tracking of financial activities. This detailed recording is crucial for accuracy in financial statements and for maintaining the integrity of the company’s financial records.

The other options do not serve as the Book of Original Entry. The trial balance is a summary of all the ledger accounts and their balances at a particular date, primarily used to verify that the total debits equal total credits. The balance sheet shows the financial position of a company at a specific point in time, documenting assets, liabilities, and equity. The cash flow statement provides insights into the cash inflows and outflows of the company over a certain period. Each of these documents serves different purposes in accounting and financial reporting, distinct from the role of the journal.