Source documents are the evidences of business transactions which
provide information about the nature of the transaction, the date, the amount and the
parties involved in it. Transactions are recorded in the books of accounts when they actually take place and are duly supported by source documents. According to the verifiable objective principle of Accounting, each transaction recorded in the books of accounts should have adequate proof to support it. These supporting documents are the written and authentic proof of the correctness of the recorded transactions. These documents are required for audit and tax assessment. They also serve as the legal evidence in case of a dispute. The following are the most common source documents. 4.1.1 Cash Memo When a trader sells goods for cash, he gives a cash memo and when he purchases goods for cash, he receives a cash memo. Details regarding the items, quantity, rate and the price are mentioned in the cash memo.
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Cash Memo vinoth watch Co., 135, South Usman Road, Thyagaraya Nagar, Chennai-17. No: 52 Date : 18.8.2003 To ................................................................................................
Qty. Description
Rate Rs.
Amount Rs. 3 Titan Regulia 1,800 5,400 2 Titan Raga 1,200 2,400 7,800 Less: Discount 10% 780 5 Total 7020 Goods once sold are not taken back. Manager For Vinoth Watch Co.
4.1.2 invoice or Bill When a trader sells goods on credit, he prepares a sale invoice. It contains full details relating to the amount, the terms of payment and the name and address of the seller and buyer. The original copy of the sale invoice is sent to the purchaser and its duplicate copy is kept for making records in the books of accounts. Similarly, when a trader purchases goods on credit, he receives a credit bill from the supplier of goods.
iNvOiCe ramesh electronics 306, Anna Salai, Chennai - 600 002. No. 405 Date : 20.8.2003 Name & address of the Customer : Bhanu Enterprises 43, Eldams Road, Teynampet, Chennai - 18. Terms : 5% cash discount if payment is made within 30 days.
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Qty. Description
Rate Rs.
Amount Rs. 5 Refrigerators 9,000 45,000 10 Washing Machines 15,000 1,50,000 1,95,000 Sales Tax @ 10% 19,500 2,14,500 Handling & delivery charges 1,500 15 Total 2,16,000 (Rupees Two lakhs sixteen thousand only)
Partner E&O.E For Ramesh Electronics Note : E.&O.E., means errors and omissions excepted. In other words, if there is any error in the invoice, the same has to be adjusted accordingly. 4.1.3 receipt When a trader receives cash from a customer, he issues a receipt containing the date, the amount and the name of the customer. The original copy is handed over to the customer and the duplicate copy is kept for record. In the same way, whenever we make payment, we obtain a receipt from the party to whom we make payment. reCeiPT Saravana Book House 43, 1st Main Road, Chennai - 35. Receipt No. 315 Date :16.9.2003 Received with thanks a sum of Rs. 15,000 (Rupees fifteen thousand only) from M/s. Sulthan & Sons being the supply of books as per the list enclosed. Cheque/DD/No. : 10345 Dt. : 10.9.2003 Canara Bank, Trichy.
Seal Note : If the amount is more than Rs.500, affix a revenue stamp.
Signature
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4.1.4 debit Note A debit note is prepared by the buyer and it contains the date of of the goods returned, name of the supplier, details of the goods returned and reasons for returning the goods. Each debit note is serially numbered. A duplicate copy or counter foil of the debit note is retained by the buyer. On the basis of debit note, the suppliers account is debited in the books. DEBIT NOTE ganesh Traders No : 315 22, Ram Nagar, Date: 14.6.2003 Chennai - 600 015 Name & Address of Supplier : Shanmuga Traders 122, III Street Chennai - 600 021. Terms : 5% cash discount if payment is made within 30 days. Date Particulars Rs. Rs. 2003 June 14 20 FM Radio sets purchased under your
invoice No.394, dated, 2nd June, 2003, now returned, as the sets are not in working
conditions @ Rs.75 per set. Add Packing expenses 1,500 100
1,600 Total 1,600 E & O., E Manager 4.1.5 Credit Note A credit note is prepared by the seller and it contains the date on which goods are returned, name of the customer, details of the goods received back, amount of such goods and reasons for returning the goods. Each credit note is serially numbered. A duplicate copy of the credit note is retained for the record purpose. On the basis of credit note, the customer’s account is credited in the books. CrediT NOTe No : 243 Date: 15.9.2003 COTTON wOrLd 22, Metha Nagar, Chennai - 600 029. Name & Address of the Customer : Palanichami & Sons 122, Oppanakkara Street, Coimbatore - 6.
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Terms : 2% cash discount if payment is made within 30 days. Date Particulars Rs. Rs. 2003 Sept 15 T-Shirts - 32” - 200 Nos @ Rs.100 each Less : Discount @10% 20,000 2,000 (Return due to inferior quality) 18,000 Total 18,000
E & O., E Manager 4.1.6 Pay-in-slip Pay-in-slip is a form available in banks and is used to deposit money into a bank account. Each pay-in-slip has a counterfoil which is returned to the depositor duly sealed and signed by the bank official. This source document relates to bank transactions. It gives details regarding date, account number, amount deposited (in cash or cheque) and name of the account holder. Pay-in-slip Indian Overseas Bank ...........................Branch .......200..... Current Acount No ..... of (name)........................ Cheque/Cash Rs............ Rupees ........................... ........................................ ................... ................... Cashier Clerk Authorised Official This counter foil is not valid unless signed by an authorised official of the Bank (in addition to the cashier in case of deposit by cash). indian Overseas Bank ....................... Branch Credit Current Account No. .......200....... of (name) ....................................................... Rupees ........................................................... ................................................. as per details furnished overleaf Cheque/Cash Rs..................... L.F Initial ......................................................................... Depositor’s Signature Cashier/Clerk Authorised official Name & Address............................ Tel. No............ ......................................................................... %. Seal 4.1.7 Cheque A cheque is a document in writing drawn upon a specified banker to pay a specified sum to the bearer or the person named in it and payable on demand. Each cheque book has a counterfoil in which the same details in the cheque are filled. The counterfoil remains with the account holder for his future reference. The counterfoil forms the source document for entries to be made in the books of accounts.
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Cheque
Date : ...................... PAY ........................................................................................ ................................................................................................. OR BEARER RUPEES ....................................................................................................... ............................................................................... Rs. A/c. No. INTL.
The Tamil Nadu State Apex Co-operative Bank Ltd., Ashok Nagar, 273-B, 10th Avenue, CHENNAI - 600 083. "3 0 8 8 9 4 600091007 " : 10 4.1.8 vouchers A voucher is a written document in support of a business transaction. Vouchers are prepared by an accountant and each voucher is counter signed by an authorised person of the organisation.
No.
vOUCHer
Date
Rs. Pay to .......................................................................................................... Rs. in Words ................................................................................................ being ............................................................................................................ and debit ...................................................................................................... Authorised by Received the above sum of Rs. .....................
Paid by Drawn on Bank Cash (or) Cheque Receiver’s Signature

The vouchers are properly filed according to their serial numbers so that the auditors may easily vouch them and these may also serve as documentary evidence in future.
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Bills receivable, bills payable, wage sheet/salaries pay acquittance, correspondence etc., also serve as the source documents. Thus, there must be a source document for each transaction recorded in the books of accounts. Note : The formats of the source documents are given above, only to know the details but not for the preparation.