JSSB FAA EXAM — ACCOUNTING NOTES

Topic: Voucher Approach in Accounting

Aligned with NCERT (Class 11 Accountancy), Tamil Nadu State Board Accountancy syllabus, and J&K exam pattern

Includes: Concept Notes • Flow Diagram • MCQs • Statement/Assertion-Reason Based Questions • PYQ-Style Practice Set • Answer Key

1. Introduction

The Voucher Approach (also called the Voucher System) is a method of accounting in which every business transaction is first recorded/evidenced through a document called a “voucher” before it is entered into the books of account (Journal, Subsidiary Books, or Ledger). It forms an important part of the “Origin of Transactions – Source Documents and Vouchers” chapter common to NCERT Class 11 Accountancy and Tamil Nadu State Board Accountancy, and is frequently tested in JKSSB, JKPSC and similar J&K recruitment exams for Accounts/Finance posts.

2. Meaning and Definition of Voucher

Voucher: A written document that serves as documentary evidence of a business transaction and forms the basis on which an accounting entry is recorded in the books of account.

In simple words — no voucher, no entry. Every rupee recorded in the books must be traceable back to a voucher, and every voucher must be traceable back to a genuine transaction.

3. Types of Vouchers

Vouchers are broadly classified into two categories:

3.1 Source Vouchers (Supporting Vouchers)

Original documents that come into existence when a transaction takes place. They are the primary evidence of the transaction.

• Cash memo
• Invoice / Bill (purchase or sales)
• Receipt
• Cheque / Cheque counterfoil / Pay-in-slip
• Debit note (issued when goods are returned to the supplier, or on an increase in liability)
• Credit note (issued when goods are returned by a customer, or on a reduction in receivable)

3.2 Accounting Vouchers (Recording Vouchers)

Prepared by the accountant on the basis of source vouchers, for the purpose of recording the transaction in the books. Accounting vouchers are further divided into:

(a) Cash Voucher

• Debit Voucher (Payment Voucher) — prepared for every cash payment made by the business.
• Credit Voucher (Receipt Voucher) — prepared for every cash receipt received by the business.

(b) Non-Cash Voucher / Transfer Voucher (Journal Voucher)

• Prepared for credit transactions and non-cash adjustments such as credit sales, credit purchases, depreciation, outstanding expenses, bad debts, rectification entries, etc.

(c) Compound / Combined Voucher

• Used when a single transaction involves more than one debit and/or more than one credit account (i.e., a compound journal entry).

4. Flow of the Voucher Approach (Diagram)

The voucher system follows this sequential flow from the occurrence of a transaction to the preparation of financial statements:

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5. Steps Involved in the Voucher Approach

• Step 1: Identify that a business transaction has occurred.
• Step 2: Obtain / prepare the relevant source document (invoice, cash memo, receipt, etc.).
• Step 3: Prepare the appropriate accounting voucher (cash/debit, credit, or transfer voucher) based on the source document.
• Step 4: Voucher is serially numbered, dated, and get the necessary approval/authorisation.
• Step 5: Voucher is filed systematically for future reference and audit.
• Step 6: On the basis of the voucher, the entry is recorded in the Journal or the relevant Subsidiary Book.
• Step 7: Entries are posted to the Ledger, and the process continues up to preparation of the Trial Balance and Final Accounts.

6. Advantages of the Voucher Approach

• Provides documentary/legal evidence for every transaction recorded.
• Strengthens internal check and internal control within the organisation.
• Helps in fixing responsibility, since vouchers are signed by the preparer and the approving authority.
• Reduces the possibility of errors and fraud.
• Facilitates easier audit and verification of accounts.
• Useful in reconstructing books of account from incomplete records (Single Entry System) using vouchers as evidence.
• Simplifies recording of a large volume of transactions in bigger organisations and government offices.

7. Voucher Approach vs. Traditional (Direct) Approach

8. Multiple Choice Questions (MCQs)

Q1. A voucher is a document that serves as:

(a) Evidence of a business transaction

(b) A bank statement

(c) A balance sheet

(d) None of the above

Q2. Vouchers prepared on the basis of source documents, for recording in the books, are called:

(a) Source vouchers

(b) Accounting vouchers

(c) Bank vouchers

(d) Ledger vouchers

Q3. Which of the following is a source voucher?

(a) Journal voucher

(b) Cash memo

(c) Transfer voucher

(d) Compound voucher

Q4. A debit voucher is prepared for:

(a) Cash receipt

(b) Cash payment

(c) Credit sale

(d) Credit purchase

Q5. A credit voucher is prepared for:

(a) Cash payment

(b) Cash receipt

(c) Depreciation

(d) Bad debts

Q6. A transfer voucher is also known as:

(a) Cash voucher

(b) Journal voucher

(c) Petty cash voucher

(d) Bank voucher

Q7. Which voucher records non-cash transactions like depreciation, bad debts, and outstanding expenses?

(a) Debit voucher

(b) Credit voucher

(c) Transfer / Journal voucher

(d) Cash voucher

Q8. The main purpose of the voucher approach is:

(a) To avoid preparing a ledger

(b) To provide documentary evidence and strengthen internal check

(c) To increase the number of transactions

(d) To replace the trial balance

Q9. Which of the following is NOT a type of accounting voucher?

(a) Debit voucher

(b) Credit voucher

(c) Transfer voucher

(d) Invoice

Q10. Vouchers should ideally be:

(a) Serially numbered and dated

(b) Left unsigned

(c) Destroyed after use

(d) Kept confidential from auditors

Q11. In government accounting offices (including J&K), vouchers mainly form the basis of:

(a) Budget preparation only

(b) Recording and audit of transactions

(c) Salary calculation only

(d) None of the above

Q12. A compound voucher is used when:

(a) Only one debit and one credit account are involved

(b) More than one debit and/or credit account is involved in a single transaction

(c) Only cash transactions occur

(d) None of the above

Q13. Which document is prepared when goods are returned TO the supplier?

(a) Debit note

(b) Credit note

(c) Cash memo

(d) Invoice

Q14. Which document is prepared when goods are returned BY a customer?

(a) Debit note

(b) Credit note

(c) Invoice

(d) Receipt

Q15. The voucher system mainly strengthens:

(a) Internal check and control

(b) External borrowing capacity

(c) Profit margin

(d) None of the above

Q16. Reconstructing final accounts from incomplete records using vouchers as evidence is best described as:

(a) Preparing accounts directly from the bank statement

(b) Using vouchers to reconstruct the books of account

(c) Ignoring documentary evidence

(d) None of the above

9. Statement-Based / Assertion–Reason Questions (PYQ Style)

Type A: Assertion (A) and Reason (R)

Directions: Mark (a) if both A and R are true and R is the correct explanation of A; (b) if both are true but R is not the correct explanation of A; (c) if A is true but R is false; (d) if A is false but R is true.

Q17. Assertion (A): Every accounting voucher must be supported by a source document.

Reason (R): Source documents provide legal and evidentiary proof of the transaction.

Type B: Statement I and Statement II

Directions: Mark (a) if both statements are correct; (b) if only Statement I is correct; (c) if only Statement II is correct; (d) if both statements are incorrect.

Q18.

Statement I: Cash vouchers are of two kinds — debit voucher and credit voucher.

Statement II: Transfer vouchers deal only with cash transactions.

Type C: Match the Following

Q19. Match Column A with Column B:

Q20. In J&K Government accounting procedure, which signature/approval on a voucher confirms that the expenditure is duly sanctioned?

(a) Preparer's signature only

(b) Countersignature / approval of the competent authority

(c) Auditor's signature only

(d) None of the above

10. Answer Key

11. Quick Revision Points

• Voucher = documentary evidence → basis for every accounting entry.
• Source Voucher (original document) → Cash memo, Invoice, Receipt, Debit/Credit Note.
• Accounting Voucher (prepared by accountant) → Debit (payment), Credit (receipt), Transfer/Journal (non-cash), Compound (multiple accounts).
• Flow: Transaction → Source Document → Accounting Voucher → Approval → Journal/Subsidiary Book → Ledger → Trial Balance → Final Accounts.
• Key benefit tested in exams: strengthens internal check, fixes responsibility, provides audit trail.

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