Accountancy · Ch 3 — Recording of Transactions - I
Business Transactions and Source Document
Business Transactions and Source Document
A business transaction is any event that involves an exchange of economic consideration between two parties. The key idea is reciprocal giving and receiving — one party gives something and receives something else in return. For example, when your father buys a computer for ₹35,000, the transaction has two sides: he gives cash (₹35,000) and receives the computer. In accounting, this is called the dual aspect — every transaction affects at least two accounts.
The give aspect is the outflow (what you part with), and the take aspect is the inflow (what you receive). In the computer purchase, cash is given (outflow) and the computer is taken (inflow). This two-fold effect is the foundation of double-entry bookkeeping.
Every business transaction has a two-fold effect — it is recorded in at least two accounts. One account is debited and another is credited.
Source Documents (Vouchers)
Business transactions are usually supported by written evidence. This evidence is called a source document or a voucher. Common examples include:
- Cash memo
- Invoice
- Sales bill
- Pay-in-slip
- Cheque
- Salary slip
For petty expenses where no documentary evidence exists, the firm itself prepares a voucher with all necessary details and gets it approved by an appropriate authority. All vouchers are arranged in chronological order, serially numbered, and kept in a separate file. Every entry in the books of account is made only on the basis of these vouchers.
Specimen Transaction Voucher
A transaction voucher typically contains the following fields:
| Field | Details |
|---|---|
| Name of Firm | |
| Voucher No. | |
| Date |