- Business transactions are exchanges of economic consideration between parties and have two-fold effects that are recorded in at least two accounts.
- Business transactions are usually evidenced by an appropriate documents such as Cash memo, Invoice, Sales bill, Pay-in-slip, Cheque, Salary slip, etc.
- A document which provides evidence of the transactions is called the Source Document or a Voucher.
- At times, there may be no documentary for certain items as in case of petty expenses.
- In such case voucher may be prepared showing the necessary details and got approved by appropriate authority within the firm.
- All such documents (vouchers) are arranged in chronological order and are serially numbered and kept in a separate file.
- All recording in books of account is done on the basis of vouchers.
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