SOURCE
DOCUMENTS AND
PREPARATION OF
VOUCHERS
WHAT IS A SOURCE DOCUMENT?
A source document is the original document that contains the details
of a business transaction. A source document captures the key
information about a transaction, such as the names of the parties
involved, amounts paid, the date, and the substance of the
transaction. Source documents are frequently identified with a unique
number, so that they can be differentiated in the accounting system.
The pre-numbering of documents is particularly useful, since it
allows a company to investigate whether any documents are missing.
CASH MEMO
When goods are sold against cash, the seller prepares a
cash memo. It contains details such as goods sold,
quantity, rate of items, and total amount received, as well
as the date of transaction and other terms and conditions.
This serves as evidence of sales for the seller and
evidence of goods purchased against cash for the
purchaser.
INVOICES OR BILLS
When goods are sold on credit, the seller prepares an invoice or
bill. It details to whom the goods are sold, the goods sold, and the
total sale amount. The original copy of the sales invoice is given to
the purchaser, while the duplicate is kept as an evidence of the
sale for recording it in the books of account and for future
references. Credit purchases are documented by the receipt of a
bill from the supplier to the purchaser.
RECIEPTS
Upon receiving cash or a cheque from a customer, a
receipt is generated for the received amount. This
receipt is created in duplicate: the original copy is
handed to the paying party, while the duplicate is
retained for record-keeping purposes. The receipt
includes information such as the date, amount, name
of the party, and the purpose of the payment.
PAY-IN-SLIP
A source document designed for the purpose of depositing cash or checks
into a bank is known as a deposit slip. This document called a pay-in-slip,
is provided by the bank and includes a detachable portion that the
depositor keeps for their records. Nowadays, banks often offer a designated
box where individuals can conveniently drop checks and completed pay-in-
slips together. In such instances, the detachable portion is not typically
signed. The detachable portion of the pay-in-slip contains information
regarding the deposit date and the deposited amount.
CHEQUE
cheque is a document in writing, drawn upon the bank with
which the account is held and is payable on or after the due
date. The bank provides the necessary check forms. The
recipient's name is inscribed following the phrase "pay to,"
followed by the amount indicated in both words and numerals.
The check carries a date and bears the signature of the person
issuing it. The cheque details are entered on the counterfoil
which remains with the account holder and is the source voucher
for recording the transaction in the books of accounts.
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DEBIT NOTE
A debit note is crafted as proof that a debit has been applied
to the account belonging to the individual or entity mentioned
in the debit note. This document outlines the reason behind
the debit. .the effect of a debit note is that amount due to
the supplier is reduced or, if the account is already settled,
goods can be purchased further without payment
CREDIT NOTE
A credit note is made out evidencing that credit has
been granted to a debtor.
The effect of a credit note is that the amount of the
customer's indebtedness is reduced or,
if it is already settled,
enables the customer to purchase goods to the value of
credit without further payment.
VOUCHER
WHAT IS A VOUCHER?
It is a document evidencing a business transaction. It flows from the
above definition that when a transaction is entered into, a shred of
evidence to that effect is also established. Such evidences are Source
Documents, On the basis of Source Documents, a voucher detailing
the accounts that are debited and credited is prepared
TYPES OF VOUCHERS
Source vouchers Accounting
or source documents or vouchers
supporting vouchers types:
1.Cash vouchers
2.Non-Cash or
Transfer vouchers
SOURCE VOUCHERS OR SOURCE
DOCUMENTS OR SUPPORTING
VOUCHERS
They are documents which come into existence when a
transaction is entered into.
FEATURES
It is a written document
It contains complete details of the transaction.
It is a proof of a transaction having taken place
It is generally for a business transaction
It is signed by the maker
ACCOUNTING VOUCHERS
An accounting voucher is a written document containing an analysis
of business transactions for accounting and recording purposes,
prepared by the accountant on the basis of supporting vouchers and
signed by another authorised person They are also of two types,
Cash vouchers and Non-cash or transfer vouchers
FEATURES
It is a written document.
It is prepared on the basis of evidence of the transaction, i.e.
, source document.
It is an analysis of a transaction.
It is prepared and signed usually by an accountant and
countersigned by the authorised signatory
CASH VOUCHERS
CREDIT VOUCHER DEBIT VOUCHER
They are prepared when cash is
Credit vouchers serve as the official
received, cash may be received
record of cash receipts. These
against
a)Sales of goods, b)Sale of fixed vouchers are made to track different
assets, c)Sale of investments, types of business-related cash
d)Receipts from debtors, receipts.
e)Withdrawal from bank, etc.
NON-CASH VOUCHERS
The vouchers are prepared for transactions without the
involvement of cash.
examples, invoice , debit and credit notes,etc.
They are prepared for the transactions of credit sales,
credit purchases, goods returned,rectifying errors, etc.
COMPOUND VOUCHERS
Voucher which records a transaction that entails
multiple debits/credits vis-a-vis one credit/debit is
called Compund Voucher.
Compund voucher maybe: (a) Debit Voucher or (b)
Credit Voucher
A voucher showing a transaction showing multiple
debits but one credit is called Debit voucher.
A voucher showing a transaction showing multiple
credits but one debit is called Credit voucher.
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