ORIGIN OF TRANSACTIONS

• Transactions are recorded in the books of account on the basis of evidence which are bills of purchase , invoices for sales, debit and credit notes , etc.  These evidences being the basis of recording entry, are known as Source Documents.

• Every Transaction has two aspects based upon dual aspect concept of concept of duality.

The two aspects are

1. Debit (Dr)
2. Credit (Cr)

Rules of debit and credit are applied to each transactions and a voucher is prepared before recording before in the books of original entry in chronological order

A transaction with one debit and one credit is a simple transaction and voucher prepared for such transaction is known as transaction voucher.

There are certain items, which has no documentary proof, such as petty expenses. In such case necessary voucher is prepared showing the necessary details.

VOUCHER –

• Source Voucher
• Accounting Voucher

• SOURCE VOUCHER

Features of Source Voucher

                1. It is a written document.

2.  It is prepared on the basis of evidence of the transaction.

3. It contains an analysis of a transaction i.e. which account is to be debited and which is to be credited.

4. It is prepared by an accountant and countersigned by the authorized signatory.

• TYPES OF SOURCE VOUCHER

• CASH MEMO

Cash memo is the receipt which shows the sale of products or services in cash. It contains the authenticity of certain product's price sold by the supplier.

• INVOICE OR BILL

An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. When the goods are sold on credit then it is issued in duplicate where one is given to the customer and other one is kept by the seller.

• RECIEPT

When cash is received from the customer then receipt is issued in duplicate where original receipt is given to customer and duplicate is kept for the record.

• PAY-IN SLIP

Pay-in-slip is used by banks when a customer deposits a cheque or cash in the bank. The slip has a counterfoil where the stamped copy is given to the customer for the record.

• CHEQUE

A Cheque is a document which orders a bank to pay a particular amount of money from a person’s account to another individual’s or company’s account in whose name the cheque has been made or issued. The cheque is utilised to make safe, secure and convenient payments. It serves as a secure option since hard cash is not involved during the transfer process; hence the fear of loss or theft is minimized.

• CREDIT NOTE

Credit notes act as a source document for the sales return journal. In other words the credit note is evidence of the reduction in sales.

• DEBIT NOTE

 Debit note acts as the Source document to the Purchase returns journal. In other words it is an evidence for the occurrence of a reduction in expenses.

ACCOUNTING VOUCHER

Accounting vouchers may be classified as cash vouchers, debit vouchers, credit vouchers, journal vouchers, etc.

A transaction with one debit and one credit is a simple transaction and the accounting vouchers prepared for such transaction is known as Transaction Voucher.

Voucher which records a transaction that entails multiple debits/credits and one credit/debit is called compound voucher. Compound voucher may be:

(a) Debit Voucher

(b) Credit Voucher;

• The source vouchers are analyzed by accountant and he determines in which account or accounts are to be debited and credited.
•  “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 authorized person.

COMPOUND VOUCHER

Voucher which records a transaction that entails multiple debits/credits and one credit/debit is called Compound Voucher.

An accounting voucher must contain the following essential elements :

• It is written on a good quality paper;

• Name of the firm must be printed on the top;

• Date of transaction is filled up against the date and not the date of recording of transaction is to be mentioned;

• The number of the voucher is to be in a serial order;

• Name of the account to be debited or credited is mentioned;

        • Debit and credit amount is to be written in figures against the amount;

• Description of the transaction is to be given account wise;

• The person who prepares the voucher must mention his name along with signature; and

• The name and signature of the authorised person are mentioned on the voucher.