Glencoe Accounting The Steps of the Accounting Cycle The Accounting CycleSection 6.1 The Accounting Cycle accounting cycle Activities performed in an accounting period that help the business keep its records in an orderly fashion. Home

Source document Source document is a written document that provides details of a transaction and the evidence that the transaction has taken place.

Features of Source Documents Source documents contain the following information: Date of transaction. Names and addresses of parties involved in the transaction. Description of the goods or services. Amount involved. Terms and conditions related to trade discounts, cash discount and other details related to delivery. Signature of the concerned parties.

Glencoe Accounting The Steps of the Accounting Cycle The Accounting CycleSection 6.1 Collect and verify source documents. Analyze each transaction. Journalize each transaction. Step 1Step 2Step 3 Home

Types of Source Documents Invoice Issued by the seller to the buyer. Informs how much to be paid for the goods or services supplied. Original copy is send to buyer and duplicate retained by the seller. more about Invoice...

CREDIT NOTE credit note is issued by the seller to the buyer. In cases where the goods have been overcharged, or when the buyer returns damaged goods. It informs the buyer about the amount credited do the buyers account. Original copy is send to the buyer and duplicate is retained by the seller.

Debit Note It is issued by the seller to the buyer. It acts as an additional invoice in case the seller has undercharged his goods or services. It informs the buyer about the extra amount which has to be paid to the seller. Original copy is send to the buyer and duplicate is retained by the seller.

Payment Voucher It records the payment of money to a third party. Voucher is a bond of the redeemable transaction type which is worth a certain monetary value and which may be spent only for specific reasons or on specific goods. Examples include (but are not limited to) housing, travel, and food vouchers. The term voucher is also a synonym for receipt and is often used to refer to receipts used as evidence of, for example, the declaration that a service has been performed or that an expenditure has been made.monetary valuehousingtravelfoodreceipt evidence

Receipt It acts as an acknowledgement for the payment received. Some retailers also issue the till slip which is considered as goods as a receipt. The original copy is given to the person paying whereas the duplicate is retained by the receiver. more about Receipt...

receipt is a written acknowledgment that a specified article or payment has been received. A receipt records the sale of goods or provision of a service. If the recipient of the payment is required to collect a tax from the customer, the amount collected would also be included on the receipt and the amount would be deemed to have been collected on behalf of the relevant government tax authoritypayment

Bank Statement This is a report sent by the bank to its current account holder. It contains information related with money deposited into the bank and money withdrawn out of the account during a particular period of time.

Examples

Glencoe Accounting The Steps of the Accounting Cycle The Accounting CycleSection 6.1 Collect and verify source documents. Analyze each transaction. Journalize each transaction. Step 1Step 2Step 3 Determine the debit and credit portions of each transaction by analyzing the source document. In the real world, you must examine this document to determine what happened in a business transaction. Home

Glencoe Accounting The Steps of the Accounting Cycle The Accounting CycleSection 6.1 Collect and verify source documents. Analyze each transaction. Transactions are entered into a journal. This is journalizing. Step 1Step 2Step 3 journal A chronological record of the transactions of a business. journalizing The process of recording business transactions. Home

Glencoe Accounting The Accounting Period The Accounting CycleSection 6.1 fiscal year An accounting period of twelve months. A fiscal year is not the same as a calendar year. calendar year Accounting period that begins on January 1 and ends on December 31. Home