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. |
Define accounting and state its objectives.
Complete the following work sheet:
(i) If a firm believes that some of its debtors may ′default′, it should act on this by making sure that all possible losses are recorded in the books. This is an example of the ___________ concept.
(ii) The fact that a business is separate and distinguishable from its owner is best exemplified by the ___________ concept.
(iii) Everything a firm owns, it also owns out to somebody. This co-incidence is explained by the ___________ concept.
(iv) The ___________ concept states that if straight line method of depreciation is used in one year, then it should also be used in the next year.
(v) A firm may hold stock which is heavily in demand. Consequently, the market value of this stock may be increased. Normal accounting procedure is to ignore this because of the ___________.
(vi) If a firm receives an order for goods, it would not be included in the sales figure owing to the ___________.
(vii) The management of a firm is remarkably incompetent, but the firms accountants can not take this into account while preparing book of accounts because of ________ concept.
Giving examples, explain each of the following accounting terms:
* Fixed assets * Revenue * Expenses
* Gain * Profit * Capital
* Short-term liabilities
Discuss the concept-based on the premise do not anticipate profits but provide for all losses.
When should revenue be recognised? Are there exceptions to the general rule?
'Accounting information should be comparable'. Do you agree with this statement? Give two reasons.
Enumerate informational needs of management.
Briefly explain the term ‘favourable balance as per cash book’.
Define accounting and state its objectives.
Enumerate main objectives of accounting.
Discuss the concept-based on the premise do not anticipate profits but provide for all losses.
If a transaction is properly analysed and recorded:
(a) Only two accounts will be used to record the transaction.
(b) One account will be used to record transaction.
(c) One account balance will increase and another will decrease.
(d) Total amount debited will equals total amount credited.
Which is the last step of accounting as a process of information?
a. Recording of data in the books of accounts
b. Preparation of summaries in the form of financial statements
c. Communication of information
d. Analysis and interpretation of information
What is the money measurement concept? Which one factor can make it difficult to compare the monetary values of one year with the monetary values of another year?
Use of common unit of measurement and common format of reporting promotes;
a. Comparability
b. Understandability
c. Relevance
d. Reliability
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.
An appropriate accounting software for a small business organisation having only one user and single office location would be ........
It's good !!