Financial Accounting - I – MGT101 VU

Lesson # 13

VOUCHERS AND POSTING TO LEDGERS ACCOUNTS

Learning Objectives:
After studying this lecture, you should be able to:
• Understand different types of vouchers.
• How to book entry in voucher?
• Carrying forward the balance of an account.

Voucher
In book keeping, voucher is the first document to record an entry. Vouchers are the
documentary evidence of each financial transaction. Normally three types of vouchers are used:
• Receipt voucher
• Payment voucher
• Journal voucher

Receipt Voucher
Receipt voucher is used to record cash or bank receipt. Receipt vouchers are of two types:
• Cash receipt voucher
• Bank receipt voucher
Cash receipt voucher denotes receipt of cash. Bank receipt voucher indicates receipt of cheque
or demand draft. Standard format of cash receipt voucher is given below:
Name of the Organization
Bank Receipt / Cash Receipt OR Receipt Voucher
Date: No:

Cash / Bank code: Description / Title: ________

Description / Code Credit
Title of Account # Amount

Total:
Narration:
Prepared By: Checked By:

Payment Voucher

Payment voucher is used to record a payment of cash or cheque. Payment vouchers are of two
types:

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• Cash Payment voucher
• Bank Payment voucher
Cash Payment voucher denotes Payment of cash. Bank Payment voucher indicates payment by
cheque or demand draft. Standard format of cash Payment voucher is given below:
Name of the Organization
Bank Payment / Cash Payment OR Payment Voucher
Date: No:

Cash / Bank code: Description / Title:

Description / Code Credit

Title of Account # Amount

Total:
Naration
Prepared By: Checked By:

Journal Voucher

Journal voucher is used to record transactions that do not affect cash or bank. Standard format
of journal voucher is given hereunder:

Name Of Organization
Journal Voucher
Date: No:

Description Code Debit Credit

# Amount Amount

Total:
Narration:
Prepared By: Checked by:

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Financial Accounting - I – MGT101 VU
How to Carry Forward a Balance?

It is already mentioned that in ‘T’ account, at the end of accounting period, if one side is greater
than the other side, balancing figure will be written on the lesser side as balance. For instance,
if amount on debit side is greater than the amount on credit side, the balancing figure is written
on the credit side as balance & it is known as Debit Balance. On the other hand, if amount on
the credit side is greater than that of amount on the debit side, the balance is shown on the debit
side. It is called the Credit Balance.
At the start of next accounting period, these balances are carried forward. Debit balance is
written on the credit side, but it is the excess of debit side over the credit side, when it is carried
forward, it is written on the debit side. For example, ledger account of cash is given below:

Cash Account Account code # 1

Date Particulars Cod Dr. Date Particulars Cod Cr.
e# (Rs.) e# (Rs.)
1-3-02 Capital a/c 02 150,000 5-3-02 Office furniture 03 2,000

13-3-02 Sales a/c 07 12,000 7-3-02 Purchases a/c 04 9,000

10-3-02 Carriage a/c 05 250
21-3-02 Received from 08 25,000 21-3-02 Paid to creditors 06 7,000
debtors 23-3-02 Salaries a/c 09 2,500
25-3-02 Rent a/c 10 3,000
29-3-02 Stationery a/c
11 2,000

Balance
161,250

Total 187,000 Total 187,000

This cash account is showing the balance of Rs. 161,250 on the credit side. This balance is
excess of debit side over the credit side and, therefore, is called the debit balance.
When it is carried forward it is written on the debit side because debit side of the cash account
is greater & Rs. 161,250 is the balancing amount of the debit side of cash account. So, it is an
asset & it will be used for further expenses in the forth coming period.

Lets take another example of accrued expenses:

Accrued Expenses Account Account code # 13
Date Particulars Cod Amoun Date Particulars Cod Amoun
e# t e# t
Rs. Rs.
(Dr.) (Cr.)
31-3-02 Accrued bills 12 5,000

Balance 5,000
Total 5,000 Total 5,000
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In this account, balance is written on the debit side & it is called the credit balance. As this
balance represents excess of credit side over debit side, when it is carried forward it is again
written on the credit side.
It can also be explained like this:
• Debit balance when carried forward, is written on the debit side
• Credit balance when carried forward, is written on the credit side

This is further explained with the help of the following solved illustration:

Illustration

Following is the Trial Balance of Saeed & Sons for the month ended January 31, 2002

Saeed & Sons.

Trial Balance
As on January 31, 2002
Title of Account Code Dr. Rs. Cr. Rs.
Cash Account 01 55,000
Accrued expense Account 02 10,000
Bank Account 03 25,000
Loan Account 04 100,000
Furniture Account 05 20,000
Office Equipment 06 10,000
Total 110,000 110,000

In the month of February, following transactions took place:

No. Date Particulars

01 Feb 07 They purchased stationery worth of Rs. 5,000
02 Feb 10 They paid their first installment of loan Rs. 10,000
03 Feb 12 They received a cheque from a customer of Rs. 5,000
04 Feb 17 Accrued expenses of Rs. 5,000 are paid.
05 Feb 20 They purchased furniture of Rs. 1,000
06 Feb 23 Office equipment of Rs. 2,000 is sold
07 Feb 25 Staff salaries are paid by cheque Rs. 10,000
08 Feb 28 Sold goods for cash Rs.2,000

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Solution

The ledger accounts of Saeed & Sons will bear the following changes:

Cash Account Account code # 1

Date Particulars Code Amount Date Particulars Code Amount
# Rs. # Rs.
(Dr.) (Cr.)
1-2-02 Balance c/f 55,000 7-2-02 Stationery 10 5,000
23-2-02 Office 06 2,000
equipment. 10-2-02 Loan a/c 04 10,000
28-2-02 01 2,000 17-2-02
Sales a/c Accrued 02 5,000
expenses
05 1,000
Furniture a/c
38,000
Balance c/d
Total 59,000 Total 59,000

Accrued Expenses Account code # 2

Date Particulars Code Amount Date Particulars Code Amount
# Rs. # Rs.
(Dr.) (Cr.)
17-2-02 Accrued 01 5,000 1-1-02 Balance c/f 10,000
expenses

Balance c/d 5,000

Total 10,000 Total 10,000

Bank Account Account code # 3

Date Particulars Code Amount Date Particulars Code Amount
# Rs. # Rs.
(Dr.) (Cr.)
17-2-02 Balance c/f 01 25,000 25-2-02 Salaries a/c 10,000
12-2-02 Cheque
received 07 5,000
Balance c/d
20,000
Total 30,000 Total 30,000

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Financial Accounting - I – MGT101 VU
Loan Account Account code # 4
Date Particulars Code Amount Date Particulars Code Amount
# Rs. # Rs.
(Dr.) (Cr.)
10-2-02 Installment 01 10,000 Balance c/f 100,000
paid

90,000
Balance c/d
Total 100,000 Total 100,000

Furniture Account Account code # 5

Date Particulars Code Amount Date Particulars Code Amount
# Rs. # Rs.
(Dr.) (Cr.)
10-2-02 Balance c/f 20,000 23-2-02
20-2-02 Furniture a/c 01 1,000

Balance c/d 21,000

Total 21,000 Total 21,000

Office Equipment Account Account code # 6

Date Particulars Code Amount Date Particulars Code Amount
# Rs. # Rs.
(Dr.) (Cr.)
10-2-02 Balance c/f 10,000 Office 01 2,000
Equipment

8,000
Balance c/d
Total 10,000 Total 10,000

Balance C/F is balance carried forward & Balance C/D is balance Carried down.

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