Recording of Transactions-I - Chapter 3.1 - Preparation of Accounting Vouchers

Oct 28, 2026

Recording of Transactions-I explains the accounting process as a chain of identifying and analyzing business transactions, recording, classifying and summarising their effects, and communicating results to users. It focuses on business transactions and source documents, describing how vouchers provide evidence and may be prepared when documentary proof is missing, then arranged chronologically. It details the preparation of accounting vouchers, including transaction, compound, debit, credit, and complex/journal vouchers, plus the essential elements and preservation requirements for audit and tax purposes.

LanguageEnglish

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Reading Time2 h 14 min

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Recording of Transactions-I

3.1 Business Transactions and Source Document

3.1.1 Preparation of Accounting Vouchers

Types of vouchers: transaction, compound, debit, credit, complex/journal

11110CH03 # Recording of Transactions-I Tn chapter 1 and 2,while explaining thedevelopment and importance of accounting as asource of disseminating the financial informationalong with the discussion on basic accountingconcepts that guide the recording of businesstransactions,it has been indicated that accountinginvolves a process of identifying and analysing thebusiness transactions,recording them,classifyingand summarising their effects and finallycommunicating it to the interested users ofaccounting information. LEARNING OBJECTIVES After studying thischapter,you will be ableto: In this chapter,we will discuss the details of eachstep involved in the accounting process.The firststep involves identifying the transactions to berecorded and preparing the source documentswhich are in turn recorded in the basic book oforiginal entry called journal and are then posted toindividual accounts in the principal book calledledger. ·describe the nature oftransactionand sourcedocuments; ·explain the prepa-ration of accountinguouchers; ·apply accountingequation to explain theeffect oftransactions; ## 3.1 Business Transactions and Source Document ·record transactionsusing rules of debitand credit; After securing good percentage in your previousexamination,as promised,your father wishes tobuy you a computer.You go to the market alongwith your father to buy a computer.The dealer givesa cash memo along with the computer and inexchange your father makes cash payment of ·explain the concept ofbook of original entryand recording oftransactions injournal; 35,000.Purchase of computer for cash is anexample of a transaction,which involves reciprocalexchange of two things:(i)payment of cash,(ii)delivery of a computer.Hence,the transaction ·explain the concept ofledger and posting ofjournal entries to theledger accounts. involves this aspect,i.e.Give and Take.Payment of cash involves give aspectand delivery of computer is a take aspect.Thus,business transactions areexchanges of economic consideration between parties and have two-fold effectsthat are recorded in at least two accounts. Business transactions are usually evidenced by an appropriate documentssuch as Cash memo,Invoice,Sales bill,Pay-in-slip,Cheque,Salary slip,etc.Adocument which provides evidence of the transactions is called the SourceDocument or a Voucher.At times,there may be no documentary for certain itemsas in case of petty expenses.In such case voucher may be prepared showing thenecessary details and got approved by appropriate authority within the firm.Allsuch documents (vouchers)are arranged in chronological order and are seriallynumbered and kept in a separate file.All recording in books of account is doneon the basis of vouchers. | Transaction Voucher
Name of Firm:
Voucher No
Date
Debit account :
Credit account:
AmountR)
Narration
Prepared By:
Authorised By: | | --- | Fig.3.1:Showing specimen transaction voucher ### 3.1.1 Preparation of Accounting Vouchers Accounting vouchers may be classified as cash vouchers,debit vouchers,creditvouchers,journal vouchers,etc.There is no set format of accounting vouchers.A specimen of a simple transaction voucher is used in practice is shown infigure 3.1. These must be preserved in any case till the audit of the accounts and taxassessments for the relevant period are completed.Now a days,accounting iscomputerised and the necessary accounting vouchers showing the codenumber and name of the accounts to be debited and credited are prepared forthe purpose of necessary recording of transactions.A transaction with onedebit and one credit is a simple transaction and the accounting vouchersprepared for such transaction is known as Transaction Voucher,the format of Reprint 2026-27 which is shown in figure 3.1.Voucher which records a transaction that entailsmultiple debits/credits and one credit/debit is called compound voucher.Compound voucher may be:(a)Debit Voucher o

FAQs

What is the accounting process described in this chapter?

Accounting is described as identifying and analyzing transactions, recording them, classifying and summarising their effects, and finally communicating the information to users.

What is a source document (or voucher) and why is it important?

A source document or voucher provides evidence of transactions. Recording in books of account is done on the basis of vouchers, and vouchers are preserved until audit and tax assessments are completed.

How are accounting vouchers prepared and what types are mentioned?

Accounting vouchers may be cash, debit, credit, journal vouchers, etc., with no fixed universal format. A transaction with one debit and one credit uses a transaction voucher, while multiple debits/credits require compound or complex/journal vouchers.

Oct 28, 2026

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