Source Documents vs. Vouchers

Attribute	Source Documents	Vouchers
Definition	Original documents that provide evidence of a transaction	Written evidence of a transaction
Types	Invoices, receipts, purchase orders, etc.	Cash vouchers, debit notes, credit notes, etc.
Usage	Used to record transactions in the accounting system	Used to authorize and approve transactions
Approval	Not necessarily approved	Require approval before being recorded
Recording	Recorded in the books of original entry	Recorded in the general ledger

Introduction

Source documents and vouchers are essential components of the accounting process. They both play a crucial role in ensuring the accuracy and integrity of financial transactions. While they serve similar purposes, there are distinct differences between the two. In this article, we will compare the attributes of source documents and vouchers to understand their unique characteristics and importance in accounting.

Source Documents

Source documents are the original records that provide evidence of a transaction. These documents are created at the time of the transaction and serve as the foundation for all accounting entries. Examples of source documents include invoices, receipts, purchase orders, and bank statements. Source documents contain important information such as the date of the transaction, the parties involved, the amount, and a description of the transaction.

• Source documents are used to record transactions in the accounting system.
• They provide a trail of evidence for auditing purposes.
• Source documents help ensure the accuracy of financial records.
• They serve as a reference for future inquiries or disputes.
• Source documents are crucial for compliance with regulatory requirements.

Vouchers

Vouchers are documents that authorize the payment of a liability. They are created after a transaction has occurred and serve as a formal approval for payment. Vouchers are typically used in the accounts payable process to ensure that payments are made accurately and in accordance with company policies. Vouchers contain information such as the vendor name, amount to be paid, payment terms, and approval signatures.

• Vouchers are used to authorize payments for goods or services.
• They provide a control mechanism to prevent unauthorized payments.
• Vouchers help ensure that payments are made in a timely manner.
• They serve as a record of approved payments for auditing purposes.
• Vouchers are essential for maintaining accurate financial records.

Comparison

While source documents and vouchers both play important roles in the accounting process, there are key differences between the two. Source documents are created at the time of a transaction and provide evidence of the transaction, while vouchers are created after the transaction to authorize payment. Source documents are used to record transactions in the accounting system, while vouchers are used to approve payments. Source documents contain information about the transaction itself, while vouchers contain information about the payment to be made.

• Source documents are created at the time of the transaction, while vouchers are created after the transaction.
• Source documents provide evidence of the transaction, while vouchers authorize payment.
• Source documents are used to record transactions, while vouchers are used to approve payments.
• Source documents contain information about the transaction, while vouchers contain information about the payment.

Importance

Both source documents and vouchers are essential for maintaining accurate financial records and ensuring the integrity of the accounting process. Source documents provide a trail of evidence for transactions, while vouchers provide a formal approval for payments. Without source documents, it would be difficult to verify the accuracy of financial records, and without vouchers, there would be a lack of control over payments. By understanding the attributes of source documents and vouchers, accountants can ensure that financial transactions are recorded accurately and payments are made in accordance with company policies.

Conclusion

In conclusion, source documents and vouchers are critical components of the accounting process. While they serve similar purposes, they have distinct attributes that make them unique. Source documents provide evidence of transactions and are used to record transactions in the accounting system, while vouchers authorize payments and provide a control mechanism for payments. By understanding the importance of source documents and vouchers, accountants can ensure the accuracy and integrity of financial records, ultimately leading to better decision-making and compliance with regulatory requirements.