Scribd
Upload
2K views

Source Documents (Harsirat Kaur) (Xi-A) Accounts 4

This document defines and describes source documents in accounting. It begins by explaining that source documents provide the evidentiary basis for recording transactions in accounting books. It then defines a source document as a document that is evidence of a transaction and used to debit and credit accounts with the transaction amount. The document lists the key information contained in source documents, such as date, parties, description, amount. It provides examples of common types of source documents like cash memos, invoices, receipts, pay-in slips, checks, debit notes, and credit notes. Finally, it gives an example source document showing a purchase transaction with details of items, quantity, amount, and taxes.

Uploaded by

sirat
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
2K views

Source Documents (Harsirat Kaur) (Xi-A) Accounts 4

This document defines and describes source documents in accounting. It begins by explaining that source documents provide the evidentiary basis for recording transactions in accounting books. It then defines a source document as a document that is evidence of a transaction and used to debit and credit accounts with the transaction amount. The document lists the key information contained in source documents, such as date, parties, description, amount. It provides examples of common types of source documents like cash memos, invoices, receipts, pay-in slips, checks, debit notes, and credit notes. Finally, it gives an example source document showing a purchase transaction with details of items, quantity, amount, and taxes.

Uploaded by

sirat
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 10

SOURCE

DOCUMENTS
INTRODUCTION-
Transactions are recorded in the books of account on the basis of
evidences which are bills of purchase , invoices for sale , debit and
credit notes etc. These evidences being the basis of recording entry
are known as source documents . Rules of debit and credit are applied
to each transaction and a voucher is prepared before recording it in
the books of original entry i.e, Journal or special purpose books in a
chronological order . The entries recorded in these books of account
are transferred to the specific ledger accounts.
Meaning-
Document is an evidence of a transaction or an event and is known
as Source Document based on which accounts are debited and
credited with the transacted amount. Source document is of prime
importance in accounting because accounting is based on factual
financial information i.e, evidence . For example , a cash memo
showing cash sales, an invoice showing sales of goods on credit,
bills of purchases showing purchases of goods on credit, a receipt
made out by the receiver for cash received, etc. These documents
are source documents and are evidence in support of a transaction.
Features of source documents -
Source documents contain the following information:
1. Date of transaction.
2. Names and addresses of parties involved in the
transaction.
3. Description of the goods or services.
4. Amount involved.
5. Terms and conditions related to trade discounts, cash
discount and other details related to delivery.
6. Signature of the concerned parties.
Types of source documents
1. Cash Memo - Cash memo is prepared by the seller when goods are
sold against cash. It has details of goods sold, quantity, rate of each item
and the total amount received, besides the date of transaction and other
terms and conditions , if any.
2. Invoice or bill - An invoice or bill is prepared by the seller when the
goods are sold on credit.It has details of the party to whom goods are sold
, 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 books of account and for
future reference . For the purchaser , credit purchases are evidenced by
bill received from the supplier.
3. Receipt- When cash or cheque is received from a customer,
received 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.
4. Pay-in-Slip- This is a form available from a bank and is used to
deposit money in the bank. Each pay in slip has a counterfoil which is
returned to the depositor duly stamped and signed by the cashier of the
bank.
5. Cheque- A cheque is an order in writing drawn upon a bank to pay
a specified sum to the bearer or the person named in it. Each cheque book
has a counterfoil in which the same details as entered in the cheque are
filled. The counterfoil remains with the account holder for future reference.
6. Debit note- When we return goods to a supplier, we
prepare a debit note and send it to the supplier with the
returned goods. Debit note is a document which indicates that
suppliers account is being debited. It is a source document
which contains the date of transaction, the name of account
which is debited, the amount and the reasons for debit.
7. Credit note- When goods are received back from a
customer a credit note is sent to him indicating that the
customer’s account has been credited in our books. A duplicate
copy of the credit note is retained for record purpose.
In this bill it is mentioned that Bhullar
traders purchased cement of 82 quantity
at amount Rs.29,640 with 28 percent Gst
(14 percent CGST and 14 percent SGST)
from Sumit Trading Co.
Thank you
Submitted by - Harsirat kaur (XI-B)
Submitted to - Mr. Samant

You might also like