Source Documents

Meaning: Importance of Source Documents:

It is a written document It is important in accounting

containing evidences of the because accounting is based on
transaction. They are also known factual information, i.e. evidence.
as supporting documents.
 Commonly used Source Documents

 Cash Memo: It is prepared by the seller when goods are sold for cash.
It has details such as quantity of goods sold, rate of each item, total
amount received etc. It is an evidence for the purchaser for the goods
purchased against cash and for the seller, it is an evidence of sales for
cash.

 Invoice: It is prepared by the seller when goods are sold on credit. It

has details of the party to whom the goods are sold, the types of
goods sold and the total sale amount. The original copy of the sales
invoice is sent to the purchaser and a duplicate copy is retained as an
evidence of the sales for recording it in the book of account for future
reference.
 Commonly used Source Documents

 Receipt : When cash or cheque is received from a customer, a receipt for

the amount received is issued. The receipt is prepared in duplicate. The
original copy is given to the party making the payment and the duplicate
is kept for record. It has details of date, amount, name of the party and
the nature of the payment.

 Pay-in-Slip : It is a source document used for depositing cash or cheque

into the bank. It has a counterfoil which is retained by the depositor. The
counterfoil of the pay-in-slip gives details regarding the date and the
amount deposited

 Cheque: Cheque is a document in writing, drawn upon the bank directing

them to pay a specified amount to the specified person. The cheque
details are entered on the counterfoil which remains with the account
holder and is the source document for recording the transaction in the
books of account.
 Commonly used Source Documents

 Debit Note: It is a document evidencing that the account of the

named person is debited. It gives details regarding the reason for
debit. It is used for purchase return. 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: It is a document evidencing that the credit has been

granted to the person who has to be paid cash. It is used for Sales
Return. The effect of credit note is that the amount of the
customer’s indebtedness is reduced or, if it is already settled, to
enable the customer to purchase goods to the value of credit
without further payment.
CASH MEMO BILL / INVOICE

RECEIPT
 PAY – IN - SLIP

CHEQUE
DEBIT NOTE
CREDIT NOTE
 Voucher

 Meaning : A voucher is a document evidencing a business

transaction. On the basis of source documents, a voucher detailing
the accounts that are debited and credited are prepared.

Types of vouchers:
 Source vouchers/Source documents/Supporting vouchers
 Accounting vouchers
 Source Vouchers / Source Documents/
Supporting Voucher

 These vouchers are documents which come into existence when a

transaction is entered into.

Features of Source Voucher:

 It is a written document
 It contains complete details of the transaction
 It is a proof of a transaction having taken place
 It is signed by the maker.
 Accounting Vouchers

 It is a written document containing the analysis of business transactions

for accounting and recording purposes prepared by the accountant. It is
prepared on the basis of source vouchers and signed by another
authorized person.

Features of Source Voucher:

 It is a written document
 It is prepared on the basis of evidence of the transaction
 It is the analysis of a transaction.
 It is prepared and signed usually by an accountant and countersigned by
the authorized signatory.
 Types of Accounting Vouchers

 Cash Voucher : It refers to the voucher that is prepared at the time of

receipt or payment or cash and cheque. There are two types of Cash
Voucher:
1. Credit Voucher : These vouchers are prepared when cash is received
Ex: Sale of goods, Sale of assets etc.
2. Debit Voucher: These vouchers are prepared when cash is paid.
Ex: Purchase of goods, Purchase of assets etc.

 Non Cash Voucher / Transfer Voucher

These vouchers are prepared for transactions not involving cash. Ex: Debit
note, Credit note, Credit purchases, Credit sales etc.
ALL THE BEST