Differentiate between source documents and vouchers.
Basis of Difference |
Source Documents |
Vouchers |
Meaning |
It refers to the documents in writing, containing the details of events or transactions. |
When source document is considered as evidence of an event or transaction, then it is called voucher. |
Purpose |
It is used for preparing accounting vouchers. |
It is used for analysing the transactions. |
Recording |
It acts as a basis for preparing accounting voucher that helps in recording. |
It acts as a basis for recording transactions. |
Preparation |
It is prepared at the time when an event or a transaction occurs. |
It can be prepared either when an event or a transaction occurs, or later on. |
Legality/Validity |
It can be used as evidence in the court of law. |
It can be used for assessing the authentication of transactions. |
Prepared By |
It is prepared by the persons who are directly involved in the transactions, or who are authorised to prepare or approve these documents. |
It is prepared by the authorised persons or by the accountants. |
Examples |
Cash memo, invoice, and pay-in-slip, etc. |
Cash memo, invoice, pay-in-slip (if used as evidence), debit note, credit note, cash vouchers, transfer vouchers, etc. |
What is a journal? Give a specimen of journal showing at least five entries.
Voucher is prepared from:
(i) Documentary evidence
(ii) Journal entry
(iii) Ledger account
(iv) All of the above
The journal entry to record the sale of services on credit should include:
(a) Debit to debtors and credit to capital.
(b) Debit to cash and Credit to debtors.
(c) Debit to fees income and Credit to debtors.
(d) Debit to debtors and Credit to fees income.
A purchase of machine for cash should be debited to:
(i) Cash account
(ii) Machine account
(iii) Purchase account
(iv) None of these
Select Right Answer:
Voucher is prepared for:
(i) Cash received and paid
(ii) Cash/Credit sales
(iii) Cash/Credit purchase
(iv) All of the above
Should a transaction be first recorded in a journal or ledger? Why?
Cash withdrawn by the Proprietor should be credited to:
(i) Drawings account
(ii) Capital account
(iii) Profit and loss account
(iv) Cash account
Choose the Correct Answer :
The ledger folio column of journal is used to:
(a) Record the date on which amount posted to a ledger account.
(b) Record the number of ledger account to which information is posted.
(c) Record the number of amounts posted to the ledger account.
(d) Record the page number of the ledger account.
What entry (debit or credit) would you make to:
(a) increase revenue
(b) decrease in expense,
(c) record drawings
(d) record the fresh capital introduced by the owner.
Give a specimen of an account.
Name any two types of commonly used negotiable instruments.
Why is it necessary to record the adjusting entries in the preparation of final accounts?
State the meaning of incomplete records?
What is ‘Depreciation’?
Briefly state how the cash book is both journal and a ledger.
State the meaning of a trial balance?
State the four basic requirements of a database applications.
Define accounting.
State the different elements of a computer system.
Why is it necessary for accountants to assume that business entity will remain a going concern?
Distinguish between straight line method and written down value method of calculating depreciation.
State the limitations of trial balance?
Mr. Sunrise started a business for buying and selling of stationery with ₹ 5,00,000 as an initial investment. Of which he paid ₹ 1,00,000 for furniture, ₹ 2,00,000 for buying stationery items. He employed a sales person and clerk. At the end of the month he paid ₹ 5,000 as their salaries. Out of the stationery bought he sold some stationery for ₹ 1,50,000 for cash and some other stationery for ₹ 1,00,000 on credit basis to Mr. Ravi. Subsequently, he bought stationery items of ₹ 1,50,000 from Mr. Peace. In the first week of next month there was a fire accident and he lost ₹ 30,000 worth of stationery. A part of the machinery, which cost ₹ 40,000, was sold for ₹ 45,000.
From the above, answer the following :
1. What is the amount of capital with which Mr. Sunrise started business?
2. What are the fixed assets he bought?
3. What is the value of the goods purchased?
4. Who is the creditor and state the amount payable to him?
5. What are the expenses?
6. What is the gain he earned?
7. What is the loss he incurred?
8. Who is the debtor? What is the amount receivable from him?
9. What is the total amount of expenses and losses incurred?
10. Determine if the following are assets, liabilities, revenues, expenses or none of the these: sales, debtors, creditors, salary to manager, discount to debtors, drawings by the owner.
Tick the Correct Answer
Which of the following is not a business transaction?
a. Bought furniture of ₹ 10,000 for business
b. Paid for salaries of employees ₹ 5,000
c. Paid sons fees from her personal bank account ₹ 20,000
d. Paid sons fees from the business ₹ 2,000
Sales returns from Megha 1,600 were posted to her account as 1,000.
This is an error of ..................................
The wrong effect has been:
The correct effect should have been:
The rectification entry will be.
If the accounting information is not clearly presented, which of the qualitative characteristic of the accounting information is violated?
Briefly state how the cash book is both journal and a ledger.
Match the items given under ‘A’ with the correct items under ‘B’
(i) Closing stock is credited to (a) Trial balance
(ii) Accuracy of book of account is tested by (b) Trading account
(iii) On returning the goods to seller, the buyer sends (c) Credit note
(iv) The financial position is determined by (d) Balance sheet
(v) On receiving the returned goods from the (e) Debit note
buyer, the seller sends
Explain, using examples, the relationship between the organisational MIS and the other functional information system in an organisation. Describe how AIS receives and provides information to other functional MIS.
If wages paid for installation of new machinery is debited to wages Account, it is:
(a) An error of commission.
(b) An error of principle.
(c) A compensating error.
(d) An error of omission.
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