Accounting Vouchers Foundation of Financial Recordkeeping

Accounting Vouchers:
Foundation of Financial
Recordkeeping
• Accounting vouchers serve as the primary source documents for
recording financial transactions in any organization.
• These vouchers act as a comprehensive record of every financial
activity, providing a detailed trail of the money flow within the
business.
• They are critical for maintaining accurate financial records,
ensuring accountability, and facilitating efficient financial
management.
by Akhila Boban
Essential Elements of Accounting Vouchers
High-Quality Paper
1 2 Firm Name
Vouchers should be printed on durable, The name of the business or organization
high-quality paper to ensure they should be clearly printed on the top of each
withstand handling and storage over time. voucher for easy identification and
This helps preserve the integrity of the traceability. This helps distinguish
financial records. vouchers from different entities.
3 Date of Transaction 4 Voucher Number
The voucher should clearly state the date A unique sequential number is assigned to
of the transaction, not the date of each voucher to ensure a clear
recording. This allows for accurate identification and prevent duplication. This
tracking of the timing of financial events, helps maintain a systematic record of all
essential for financial reporting and financial transactions.
analysis.
Types of Accounting Vouchers
Cash Vouchers
Cash vouchers document transactions involving the receipt or
disbursement of cash. They include details such as the date, amount,
purpose, and the parties involved. Examples include receipts for
cash sales, payments made to suppliers, and cash withdrawals from
the bank.
Debit Vouchers
Debit vouchers record transactions that increase an asset or expense
account, while simultaneously decreasing another account. These
vouchers typically involve recording purchases of goods or services,
payment of salaries, or recording depreciation expense.
Credit Vouchers
Credit vouchers document transactions that increase a liability,
equity, or revenue account, while simultaneously decreasing another
account. These vouchers typically involve recording sales, receiving
payments from customers, or recording income earned.
Journal Vouchers
Journal vouchers are used to record complex transactions that
involve multiple accounts. They provide a detailed breakdown of the
debit and credit entries for each affected account, allowing for
greater accuracy and clarity in financial records.
Accounting Equation: The
Foundation of Double-Entry
Bookkeeping
Assets Liabilities Capital
Resources owned Obligations owed Owner's

by the business to outsiders investment in the
business
Examples: Cash, Examples: Examples:

Inventory, Accounts Owner's
Equipment Payable, Loans Contributions,
Retained
Earnings
Understanding the Accounting Equation
The accounting equation signifies that the total assets of a business are always equal to the combined value of its liabilities
and capital. This fundamental principle serves as the foundation of double-entry bookkeeping, ensuring that every
transaction is recorded in a balanced manner.
The equation can be expressed as: Assets = Liabilities + Capital
The equation can be rearranged to solve for any of the three components:
(i) Assets - Liabilities = Capital
(ii) Assets - Capital = Liabilities

Rules of Debit and Credit: The
Language of Accounting
Assets
Debit to increase, Credit to decrease
Liabilities
Credit to increase, Debit to decrease
Capital
Expenses/Losses
Debit to increase, Credit to decrease
Revenues/Gains
Applying the Rules of Debit and Credit
Transaction: Purchase of Transaction: Cash Sales Transaction: Payment of Rent
Inventory on Credit Expense
This transaction increases cash
This transaction increases inventory (asset) and sales revenue (revenue). This transaction decreases cash
(asset) and accounts payable (asset) and increases rent expense
• Debit: Cash
(liability). (expense).
• Credit: Sales Revenue
• Debit: Inventory • Debit: Rent Expense
• Credit: Accounts Payable • Credit: Cash

Importance of Accurate Accounting Vouchers
Accurate accounting vouchers play a crucial role in financial reporting, decision-making, and regulatory compliance.
They provide a detailed audit trail, facilitate financial analysis, and ensure that all transactions are properly recorded
and accounted for. Well-maintained accounting vouchers enable businesses to:
• Track financial performance and identify trends

• Prepare accurate financial statements for stakeholders
• Comply with tax regulations and avoid penalties
• Make informed business decisions based on reliable financial data
• Demonstrate transparency and accountability to stakeholders
Transactions Examples
1. Rohit started busineswith cash ` 5,00,000
2. Opened a bank account with an amount of ` 4,80,000
3. Opened a bank account with an amount of ` 4,80,000
4. . Bought Plant and Machinery from Ramjee lal for the business for - ` 1,25,000
5. Goods purchased from Sumit Traders for ` 55,000
6. Goods costing ` 25,000 sold to Rajani Enterprises for ` 35,000

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Accounting Vouchers:

Assets Liabilities Capital

Resources owned Obligations owed Owner's

Examples: Cash, Examples: Examples:

The equation can be expressed as: Assets = Liabilities + Capital

(i) Assets - Liabilities = Capital

(ii) Assets - Capital = Liabilities

• Credit: Accounts Payable • Credit: Cash

• Track financial performance and identify trends

2. Opened a bank account with an amount of ` 4,80,000

3. Opened a bank account with an amount of ` 4,80,000

5. Goods purchased from Sumit Traders for ` 55,000

6. Goods costing ` 25,000 sold to Rajani Enterprises for ` 35,000

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