Question

Collection of source of documents preparation of vouchers recording of transaction with the help of vouchers

Answer 1

Answer:

Explanation:

A document which becomes the basis for recording a transaction in the books of account is called source document. These documents show the nature and amount of the transaction and named vouchers. Vouchers are the receipts, bills, cash memos, invoices, salaries bills, wages bills, travelling allowance bills, counterfoils of cheques, registration deeds, and any other form of written proof that the transaction has actually taken place and can be verified from the d9cuments.

Whenever we sell goods, we prepare invoice for sending goods out of station, bills for credit sales, and cash memos for cash sales. The original copy is handed over or sent to the purchaser but the duplicate copy is kept as record in the business. These duplicate copies are the source documents for making record in our books of accounts.

In the same way, while making purchase we receive original copy of invoices or bills or cash memos. These copies also work as source documents for recording purchase. Whenever we make payment we obtain receipt from the party receiving payment. While making payment of rent to landlord, a receipt for the rent is received.

Workers and employees affix their signature on wages and salaries bills on receiving their wages and salaries. Insurance Company, Delhi Electric Supply Undertaking (DESU), Water Works issue receipts for having received the payment. Buses, railways and airlines issue tickets on receiving payments. We receive receipts even for petty and insignificant payment. These receipts are the source documents for accounting records.

The first step in accounting is to identify the origin of the transaction which is undoubtedly based upon documentary evidence known as source documents.