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Transactions: Origin Of: Source Documents of Accountancy

This document discusses source documents and vouchers in accountancy. [1] Source documents like cash memos, invoices, receipts, pay-in-slips and cheques provide evidence for business transactions that are then recorded in account books. [2] Vouchers are prepared based on source documents to record transactions in journals, with separate vouchers indicating which accounts to debit and credit. [3] There are two main types of vouchers - cash vouchers for receipts and payments, and non-cash or transfer vouchers for credit transactions, returns and other non-cash events.

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2K views4 pages

Transactions: Origin Of: Source Documents of Accountancy

This document discusses source documents and vouchers in accountancy. [1] Source documents like cash memos, invoices, receipts, pay-in-slips and cheques provide evidence for business transactions that are then recorded in account books. [2] Vouchers are prepared based on source documents to record transactions in journals, with separate vouchers indicating which accounts to debit and credit. [3] There are two main types of vouchers - cash vouchers for receipts and payments, and non-cash or transfer vouchers for credit transactions, returns and other non-cash events.

Uploaded by

Mradul Agrawal
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Origin of Transactions: Source Documents of Accountancy

Meaning of Source Documents


Each business transactions should be supported by the documentary evidence such as cash
memo, invoice, etc., on the basis of which transactions are recorded in the books of accounts.
These documents are known as Source Documents or Supporting Documents.
Some of the important Source Documents are discussed below:
1. Cash Memo
Cash memo is prepared by the seller when goods are
sold for cash. When goods are purchased for
cash, cash memo is received as evidence for
purchase. Cash memo has details of goods sold,
quantity, rate of each item and total amount
received.

2. Invoice or Bill
An Invoice or Bill is prepared by the seller when goods
are sold for credit. The original copy of the invoice
is sent to the purchaser and its duplicate copy is
kept for recording the transaction in the books of
accounts.
Similarly, when goods are purchased on credit,
this invoice received from the seller is known as
Credit bill. We make an invoice for credit sale but
receives a credit bill on credit purchase. Both are
terms are synonymously used.

3. Receipt
When the business receives cash or
cheque from a customer, a receipt
for the amount received is issued.
The original copy of the receipt is
given to the customer and the
duplicate copy is kept for recording the transaction.
4. Pay-in-Slip
It is a document, available from a bank, used for
depositing cash or cheque into bank. It has a
counterfoil (part of a document, that is torn off and
kept as a record) which is kept the depositor.

5. Cheque
Cheque is an order in writing drawn upon a bank
to pay a specified sum to the bearer or the person
named in it. The cheque details are entered in the
counterfoil as well which is kept the account
holder to record the transaction in the books of
accounts.

6. Debit Note
A debit note is a document prepared when we
return goods to the supplier or when goods sold
are invoiced for less amount. In short, debit note
is prepared when the account of the opposite
party needs to be debited. This document
indicate that party’s account is being debited.

7. Credit Note
Credit note is prepared to indicate that the
opposite party’s account is being credited. For
example, when customer return the goods,
credit note is prepared to indicate that customer
account is credited with the amount of returned
goods.
Vouchers
On the basis of source documents, transactions are recorded in the vouchers and then on the
basis of vouchers, recording is done in the Journal. A separate voucher is prepared for each
transaction and it indicated which account to be debited and which account to be credited.

Types of Vouchers

Types of
Vouchers

Non-Cash or
Cash Vouchers Transfer
Vouchers

Debit Voucher Credit voucher


for Cash for Cash
Payments Receipts

1. Cash Vouchers
Cash vouchers are prepared for cash transactions i.e., cash receipts and cash payments.
There are two types of Cash vouchers:
A. Debit Voucher: These are prepared when cash payment is made. Information such
as Date of preparing voucher, serial number, Account to be debited, narration,
source document number, amount, etc., is mentioned on the voucher.

Cash payment can be against:


Cash payment of expenses
Cash purchase of Fixed Assets
Cash payment to creditors
Depositing cash into the bank
B. Credit Voucher: These are prepared when cash is received. Information such as
date of preparing voucher, source document number, name of account credited,
narration and amount is mentioned on the voucher.
Cash receipt can be:
Cash sale of goods
Cash receipt of any income such
as interest or commission
Cash sales of Fixed assets
Cash receipt from debtors
Withdrawing cash from bank.

2. Non-Cash Vouchers or Transfer Vouchers:


These vouchers are prepared for non-cash
transactions, such as:
Credit purchases of goods or
credit sale of goods
Credit purchase or credit sale if
fixed assets
Providing Depreciation
Writing off Bad debts
Credit purchase return or sales return
Information such as date of preparing voucher, serial number, name of account to be
debited and credited, narration, amount of transaction, etc.
 Compound Voucher
Voucher which records transaction that contains multiple debits and credits or multiple
debits and one credit or multiple credits or one debit.
Compound voucher can be of 2 types:
A. Debit Voucher: Document showing transaction that contains multiple debits and
one credit.
B. Credit Voucher: Document showing transaction that contains multiple credits and
one debit.
Watch this video for better understanding: https://youtu.be/9U_8copwaK0
………………………………………………………………………………………………………….Keep Learning :)

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