Source Documents Accounts
Uploaded by
Varsha GhanashSource Documents Accounts
Uploaded by
Varsha GhanashSource Documents
3rd form
Source documents are documents where original information for all transactions are found, for
example, sales and purchases invoice and credit notes.
List of source documents
Invoice
Credit note
Debit note
Bank paying-in slips
Cheque counterfoil
Receipt
BACS (Bankers’ Automated Clearing Services) Receipt
Petty Cash voucher
Correspondence
Description of each source document
Invoice- This is a document prepared by the seller when they sell goods or provide
services on CREDIT.
An invoice contains the following information:
The seller’s name and address
Purchaser’s name and address
Purchaser’s order number and date
Date of delivery
Description of goods and services supplied, including part number and catalogue
reference
Quantity and price per item
Total amount
Terms and conditions of sale
NB: The seller’s records the invoice in a sales invoice and in the purchaser’s records it is a
purchases invoice.
Credit note-This document is raised by the supplier when goods have been returned to
them by the purchaser, due to them being damaged, faulty or wrong specification. The
amount owed by the customer will be reduced by the amount on the credit note. The
credit note is sometimes printed in red to distinguish in from the invoice.
Debit note- If the supplier agrees that goods previously purchased may be returned.
When this happens a debit note is raised by the purchaser and it is sent to the supplier
giving details of the goods ad reasons for their return.
Bank paying-in slip- These forms are used for paying money into a bank account. The
recipient of the money must record on the counterfoil of the paying-in slip details of the
amount paid and by whom so that the details may be recorded in the organization’s cash
book.
Cheque counterfoil- When a Cheque is made out it is important to complete the
counterfoil, entering details of the amount paid and to whom together with any other
relevant information. This payment will also be recorded in the cashbook.
Receipt- This document acknowledges the receipt of money from a customer and is often
issued when a customer purchases goods for cash rather than on credit.
BACS- This service enables the transfer of money between banks and other financial
organizations.
Petty cash voucher- A form used by anyone requesting payment for a small item of
expenditure incurred on behalf of the business. The details of the Petty cash voucher are
then written in the Petty Cash Book. For example; Ms. Ashley purchases a clock for the
school from her own funds, in order for the money to be reimbursed she will have to fill
out a petty cash voucher.
Correspondence- If a customer is unable to pay an outstanding amount and offers to
settle the debt by giving the supplier an asset. A correspondence from the customer will
be used in this case as a source document to record this ‘out of ordinary’ transaction.
Books of Original Entry
These are books in which transactions are first entered.
List of books of original entry
The journal
Sales day book (Sales journal)
Purchases day book (Purchases journal)
Returns inwards day book (Sales returns day book/journal)
Cash Book
Petty cash book
Returns outwards day book (Purchases returns day book/journal)
Description of each book of original entry
The journal- This is used to record items that are much less common and sometimes
complicated and are not recorded in any other book of original entry.
Sales day book- A book used for listing sales invoices.
Purchases day book- A book used for listing purchases invoices.
Return outwards book- This is used to record goods returned to suppliers.
Return inwards day book- This is used to list any returns made by customers.
Cash Book- This is another book of original entry used to enter cash and bank receipts
and payments.
Petty cash book- A cash book used for making small (petty) payments.
The Ledgers
Types of ledgers
Sales ledger (debtors Purchases Ledger General Ledger (nominal
ledger) ( creditors ledger) ledger)
Shows records of Shows records of Contains the remaining
customer’s personal supplier’s personal double entry account such
accounts. account. as expenses, income,
assets, capital.
Classification of accounts
Accounts are divided into personal accounts and impersonal accounts.
Personal accounts are accounts that deal with people and firms in other words debtors and
creditors.
Impersonal accounts are divided into real and nominal accounts.
Real accounts are those which deals with possessions of the business, for example;
building, computer equipment, fixtures and fittings, stock etc.
Nominal accounts are those in which expenses and income are recorded, for example;
sales, purchases, wages, electricity, commissions received etc.
List of EXPENSES accounts List of INCOME/ REVENUE accounts
Utilities Rent received
Rent Commission received
Rate Sales
Salaries Bank interest received
Wages
Advertising
Telephone/internet
Motor expenses
Insurance
Postage
Stationery
