Understanding Standard Voucher Types

1. The Foundation: Source Documents vs. Vouchers

Before a transaction is recorded, there's usually some form of proof that it happened. This could be a cash memo for a cash purchase or an invoice for a credit sale. These are called source documents.

However, a source document doesn't tell an accountant how to record the transaction. It doesn't specify which account should be debited and which should be credited. That's where a voucher comes in.

A voucher is an internal document prepared based on a source document. Its primary purpose is to authorize and detail the accounting entry (debit and credit) for a transaction before it's entered into the system.

In a Computerized Accounting System (CAS), this process is streamlined. The system provides predefined screens for different voucher types, and once you fill in the details, it automatically handles the debit and credit postings to the respective ledgers.

2. The Core Voucher Types

While there are many specific voucher types, they can be broadly categorized. For your exam, you need to know six primary types. Let's explore each one.

The following table from Shaalaa.com provides a great overview. We will refer to it as we discuss each voucher in detail.

Now, let's break down the six key voucher types you need to know.

a) Payment Voucher

• Purpose: To record all types of payments made by the business, whether in cash or through the bank. This includes payment of expenses, payment to creditors, purchase of assets, etc.
• Accounting Logic: Based on the rule "Debit the receiver" or "Debit all expenses and losses." The account being paid or the expense account is debited, and the cash/bank account is credited.
• Example: Paying office rent of ₹5,000 by cheque. You would use a Payment Voucher to debit the "Rent Expense" account and credit the "Bank" account.

b) Receipt Voucher

• Purpose: To record all types of money received by the business, in cash or through the bank. This includes cash from sales, receipts from debtors, and other incomes.
• Accounting Logic: Based on the rule "Credit the giver" or "Credit all incomes and gains." The cash/bank account is debited, and the account of the person paying or the income account is credited.
• Example: Receiving ₹10,000 in cash from a customer, Mr. Sharma. A Receipt Voucher is used to debit "Cash" and credit "Mr. Sharma's Account."

c) Contra Voucher

• Purpose: Used exclusively for transactions that involve only cash and bank accounts. This voucher records transfers between the company's own accounts. No third party is involved.
• Key Transactions:
  1. Cash deposited into the bank.
  2. Cash withdrawn from the bank for office use.
  3. Funds transferred from one bank account to another.
• Example: Withdrawing ₹2,000 from the bank for petty cash expenses. A Contra Voucher records a debit to the "Cash" account and a credit to the "Bank" account.

d) Purchase Voucher

• Purpose: To record all purchases of goods made by the business, on both a credit and cash basis.
• Important Distinction: A Purchase Voucher records the commercial activity of buying goods. The subsequent payment for that purchase would be recorded using a Payment Voucher. In many computerized systems, a single purchase entry can handle both the purchase and payment aspects if it's a cash purchase.
• Example: Buying raw materials worth ₹25,000 from 'Supplier A' on credit. A Purchase Voucher is used to debit the "Purchases" account and credit "Supplier A's Account."

e) Sales Voucher

• Purpose: To record all sales of goods made by the business, on both a credit and cash basis. This is one of the most common vouchers.
• Important Distinction: Similar to purchases, the Sales Voucher records the sale itself. The money received from that sale is recorded using a Receipt Voucher.
• Example: Selling finished goods worth ₹50,000 to 'Customer B' on credit. A Sales Voucher is used to debit "Customer B's Account" and credit the "Sales" account.

f) Journal Voucher

• Purpose: This is an adjustment voucher used for transactions that do not involve cash or bank accounts directly. It's used for non-cash entries.
• Common Uses:
  • Recording credit purchase or sale of assets.
  • Depreciation charged on assets.
  • Making provision for doubtful debts.
  • Rectifying errors.
  • Writing off bad debts.
• Example: Charging annual depreciation of ₹15,000 on machinery. A Journal Voucher is used to debit the "Depreciation" account and credit the "Machinery" account.

This short video provides another perspective on these core voucher types, reinforcing what we've just discussed.

Conclusion

In this lesson, we established the critical role of vouchers as the primary documents for recording transactions in a CAS. You learned to distinguish them from source documents and explored the specific purpose of the six main voucher types.

Key Takeaways:

• A source document is evidence of a transaction (e.g., an invoice).
• A voucher is an internal document that specifies the debit and credit accounts for recording that transaction.
• Payment Voucher: Records all cash/bank payments.
• Receipt Voucher: Records all cash/bank receipts.
• Contra Voucher: Records transfers between cash and bank accounts.
• Purchase Voucher: Records the purchase of goods (cash or credit).
• Sales Voucher: Records the sale of goods (cash or credit).
• Journal Voucher: Records non-cash and adjustment entries.

Understanding what each voucher is used for is the first step. The next logical step is to apply this knowledge. In our next lesson, we will focus on exactly that: Determine the correct voucher type to use for a given business transaction. We'll work through practical examples to solidify your understanding and prepare you for exam questions.