Question

2 Classify the following accounts
Life Insurance Company account​

Answer 1

Answer:

After going through this lesson, you shall be able to understand the following concepts.

• Source Documents

• Vouchers meaning and their types

Source Documents

Document is a piece of paper which is used for recording any business transaction. This

document is used as an evidence for recording a transaction. In fact, it is a written proof

that a particular transaction actually took place. That is why these are termed as Source

Documents.

A source document acts as a base for recording a particular transaction. This is because

it contains information that tells which account is to be debited and which is to be

credited along with the amount of transaction. Source document is prepared at the time

when a transaction takes place. It contains details of such transaction.

Let’s understand some of the source documents.

(1) Cash Memo: Whenever goods are sold in cash, the seller prepares cash memo and

records therein the details of goods sold. It includes quantity, rate and total amount

of goods sold, along with the date of transaction.

Explanation: