PREPARATION OF VOUCHERS
What is Voucher ? First of all, we would like to understand the meaning of voucher. Voucher is a very primary accounting record which shows the authenticity of the transactions. In business so many transactions take place. To record any transaction in account books, first of all a voucher is prepared by the accountant. Therefore, we call the vouchers as the base of the accounting system.
Voucher is prepared by the accountant with the help of source document. Source document means any proof relating to the business transactions. These documents include:- bills, cash memos, receipts, bank deposit slips, cheque book counter foils, challans and other details which show the happening of any transaction in a business firm.
The proforma of a voucher depends from company to company but all the vouchers have almost same details which are to be shown in it. A voucher shows the following details:-
- Type of Voucher
- Date of Voucher
- Debit Column
- Credit Column
- Amount in figures and words.
- Total Column
- Particulars column in which brief description of the transaction is being mentioned
- Signature of accountant
- Signature of Manager or other authourised person.
- In Case of Bank Payment Voucher or Cash Payment Voucher, signature of receivers is also shown.
Types of Vouchers:- Generally, the following types of vouchers are prepared in a business firm:-
- Cash Payment Voucher
- Bank Payment Voucher or Cheque Payment Voucher
- Cash Receipt Voucher
- Bank Receipt Voucher or Cheque Receipt Voucher
- Contra Voucher
- Purchase Voucher
- Sales Voucher
- Journal Voucher
- Sales Return Voucher
- Purchase Return Voucher
- Duties of Accountant in respect of preparation of any voucher:-
Vouchers are the base of whole accounting system. The accountant has to be very careful while preparing the vouchers. Voucher is an initial document of accounting system. If there is any mistake while preparing the voucher then every thing, automatically will become wrong. Therefore, an accountant must follow the following procedure while preparing the vouchers:-
- He must verify the supporting documents thoroughly in respect of date, amount, nature of transactions etc.
- The supporting documents must be approved by an appropriate authority.
- Then, the accountant has to select the type of voucher to be prepared for the transaction.
- He must have the thorough knowledge of accounting rules.
- He has to make sure that the total of debit and credit side of voucher are equal.
- The accountant must have good command over the various accounting heads which are supposed to be debited or credited.
Simple Rules of Accounting:- As we know that the voucher contains debit and credit part. But what is debit and what is credit? One has to understand it very thoroughly because whole accounting system depends on debit and credit. In accounting system we follow the double entry system. It means that according to the nature of transaction, one account head is to be debited while other account head is to be credited with the same amount.
Account head means a name of account under which all similar type of transactions are recorded. For example:- All expenses relating to printing and stationery will be debited under “Printing & Stationery Expenses Account” head. All Sales will be recorded under “Sales Account” and so on.These accounting heads are prepared after keeping in view the requirement of management or by concerned laws. Normally, the nature of the transactions are self explained by the account heads.
At the time of preparation of voucher, the accountant must assign the correct account head otherwise every thing will be wrong and will result into wrong information. Therefore, every voucher is checked by some supervisor to avoid the mistakes. Every voucher must be signed by the accountant and the supervisor and must be supported with proof of transaction.
Following are the simple rules for Debiting or Crediting the Accounting Heads:-
Rule No. 1:- Debit what comes in i.e. any thing which is received by firm in physical position.
(a) Cash received by the business firm. In this case, cash is coming in the business. Therefore, Cash Account will be debited.
(b) Furniture purchased by business firm. It means furniture is coming in the business. So, Furniture Account should be debited.
Rule No. 2:- Credit what goes out i.e. any thing which goes out of the business firm in physical position.
(a) Cash paid by the firm. It means cash is going out of the firm. In this case the Cash Account will be credited.
(b) Suppose a company has sold its old vehicle, then the Vehicle Account will be credited because the vehicle is going out of the business.
Rule No. 3:- Debit the receiver. Here, receiver means any third party.
(a) Goods sold to M/s ABC Limited. In this transaction, the receiver is M/s ABC Ltd.. Therefore M/s ABC Ltd. will be debited.
(b) Cash paid to M/s Supple Rubbers. In this example, M/s Supple Rubber is receiver. Therefore, M/s Supple Rubber will be Debited.
(c) Cheque received from a party and deposited in to bank. In this case, The Bank is the receiver of cheque. Though, initially the cheque is received by the business firm but it has no physical value unless it is deposited in to bank. Therefore, The Bank Account will be debited.
Rule No. 4:- Credit the giver. Here, giver means any third party.
(a) Cash received from M/s Bombay Rubber Chemicals. In this case, M/s Bombay Rubber Chemicals will be credited since they are the giver of cash.
(b) Goods purchased from M/s Morning Place. In this example, M/s Morning Place will be credited since they are the supplier of goods.
Rule No. 5:- Debit all the Expenses.
All expenses of a business firm must be debited to a suitable account head.
(a) Conveyance Expenses paid to a staff. In this case Conveyance Expenses Account should be debited.
(b) Salaries paid to employees should be debited to Salaries Account.
(c) Expenses relating to traveling should be debited to Traveling Expenses Account.
Same way, different type of expenses in respect of business should be debited to concern account heads.
Rule No. 6:- Credit all the income.
All income of a business firm should be credited to suitable account head.
(a) Sale of goods:- Sales of trading items, should be credited to sales account because sale is the income of a business firm.
(b) Interest received from banks or from other parties:- Interest Received account will be credited in case of interest receipts.
(c) Commission received:- In this case Commission is income of business firm. Therefore, Commission Received will be credited.
In similar way, any other income of a business firm, will be credited in suitable heads.
IMPORTANT NOTES TO BE REMEMBERED IN CASE OF SELECTION OF PROPER ACCOUNT HEAD
1. Every receipt is not an income:- For example – Receipts may be relating to personal account not an income
2. Every payment is not an expenditure:- For example – Payment may relate to Personal accounts is not an expenditure.
3. There are certain cases where no payment is made, even then the expenditures are debited. For example:- Depreciation of fixed assets, Expenses payable or provision for expenses.
4. There are certain cases where no amount is received, even then income is credited. For example:- Interest receivable, Commission receivable etc.
FOR MORE DETAIL PLEASE READ:-
PURCHASE RETURN VOUCHER
SALES RETURN VOUCHER
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