Source Documents for Accounting

Source documents are the original records that provide evidence of financial transactions. These documents are critical for recording, verifying, and auditing financial data. In accounting, source documents are used to support the entries made in the accounting system. Here are some common source documents used in accounting:

1. Invoice

• Purpose: Records the sale of goods or services.
• Details: Includes the date of transaction, description of goods or services, quantity, price, and total amount due.
• Example: A company issues an invoice to a customer for the sale of products worth $1,000.

2. Receipt

• Purpose: Provides proof of payment received.
• Details: Includes the date, amount received, payment method, and payer’s details.
• Example: A customer receives a receipt for paying $500 in cash for a service.

3. Purchase Order

• Purpose: Authorizes the purchase of goods or services.
• Details: Includes the date, items ordered, quantity, price, and supplier details.
• Example: A company issues a purchase order to a supplier for 100 units of raw materials.

4. Payment Voucher

• Purpose: Documents the payment made to a supplier or creditor.
• Details: Includes the date, amount paid, payment method, and recipient details.
• Example: A company creates a payment voucher for a $2,000 payment made to a vendor via bank transfer.

5. Debit Note

• Purpose: Issued by a buyer to a seller as a formal request for a return of goods or adjustment in an invoice.
• Details: Includes the date, amount, reason for the debit, and transaction reference.
• Example: A company issues a debit note to a supplier for returning defective goods worth $300.

6. Credit Note

• Purpose: Issued by a seller to a buyer to acknowledge a return of goods or an adjustment in an invoice.
• Details: Includes the date, amount, reason for the credit, and transaction reference.
• Example: A company issues a credit note to a customer for returned goods worth $150.

7. Bank Statement

• Purpose: Provides a record of all transactions in a bank account.
• Details: Includes deposits, withdrawals, transfers, and balances over a specific period.
• Example: A company uses a bank statement to reconcile its bank account with its accounting records.

8. Delivery Challan

• Purpose: Documents the delivery of goods from the seller to the buyer.
• Details: Includes the date, description of goods, quantity, and delivery details.
• Example: A delivery challan is provided when goods are delivered to a customer’s warehouse.

9. Expense Report

• Purpose: Documents the expenses incurred by employees for business purposes.
• Details: Includes the date, description of expenses, amounts, and receipts.
• Example: An employee submits an expense report for travel expenses incurred during a business trip.

10. Journal Voucher

• Purpose: Records non-cash transactions and adjustments.
• Details: Includes the date, accounts involved, amounts, and a description of the transaction.
• Example: A journal voucher is used to record depreciation on fixed assets.

11. Sales Order

• Purpose: Confirms a customer’s order for goods or services.
• Details: Includes the date, items ordered, quantity, price, and customer details.
• Example: A company creates a sales order when a customer places an order for products.

12. Cheque

• Purpose: Provides a written order to a bank to pay a specified amount from the account holder’s funds.
• Details: Includes the date, payee, amount, and signature of the account holder.
• Example: A company issues a cheque to a supplier for the payment of $1,200.

Recording Source Documents in Tally Prime

Creating Ledger Accounts

1. Go to Gateway of Tally:
   • Navigate to Accounts Info > Ledgers > Create.
2. Enter Ledger Details:
   • Name of the Ledger (e.g., Sales, Purchases, Bank).
   • Under Group (select the appropriate group such as Sundry Debtors, Sundry Creditors, etc.).
3. Save the Ledger:
   • Press Enter to save the ledger.

Entering Transactions Using Vouchers

1. Sales Voucher:
   • Go to Gateway of Tally > Accounting Vouchers > F8: Sales.
   • Enter the details of the sales transaction supported by an invoice.
2. Purchase Voucher:
   • Go to Gateway of Tally > Accounting Vouchers > F9: Purchase.
   • Enter the details of the purchase transaction supported by a purchase order and supplier invoice.
3. Payment Voucher:
   • Go to Gateway of Tally > Accounting Vouchers > F5: Payment.
   • Enter the details of the payment transaction supported by a payment voucher and bank statement.
4. Receipt Voucher:
   • Go to Gateway of Tally > Accounting Vouchers > F6: Receipt.
   • Enter the details of the receipt transaction supported by a receipt.
5. Journal Voucher:
   • Go to Gateway of Tally > Accounting Vouchers > F7: Journal.
   • Enter the details of the non-cash transaction supported by a journal voucher.

Benefits of Using Source Documents

1. Verification: Provides evidence of transactions, helping to verify the authenticity and accuracy of entries.
2. Audit Trail: Creates a clear audit trail, making it easier to track and review transactions during audits.
3. Compliance: Ensures compliance with accounting standards and regulatory requirements.
4. Accuracy: Helps in maintaining accurate and complete financial records.
5. Transparency: Enhances transparency and accountability in financial reporting.