The Difference Between Source Document and Voucher is a key aspect of financial record-keeping. Both play vital roles in the accounting cycle, yet they serve distinct purposes. A source document initiates the recording process by providing proof of a transaction, while a voucher validates the transaction for its accuracy and approval. Together, they ensure transparency and compliance in financial practices, forming the foundation for accurate bookkeeping and financial statements.
What Is a Source Document?
A source document is a source report of the original journal that validates a business transaction starting from invoices, receipts, purchase orders, to bank statements that detail specifics of transactions such as date, amount, and parties concerned.
- Original Evidence: Provides proof of a transaction.
- Types: Includes invoices, receipts, purchase orders, and bank statements.
- Role in Accounting: Initiates the accounting process. Contains essential details such as date, amount, and parties involved.
Example Table: Types of Source Documents
| Type | Purpose | Example |
| Invoice | Records credit sales | Sale of goods on credit |
| Receipt | Acknowledges payment received | Rent payment receipt |
| Purchase Order | Records order details | Office supplies purchase |
What Is a Voucher?
A voucher is an internal accounting document created to authorize and account for a business transaction. It therefore summarizes details of transactions, gives references of source documents, such as invoices or receipts, and so includes necessary approvals for processing to ensure accuracy and accountability in financial records.
Example Table: Types of Vouchers
| Type | Use | Example |
| Cash Voucher | Documents cash transactions | Petty cash reimbursement |
| Journal Voucher | Adjustments in accounts | Depreciation entry |
Importance:
- Ensures accountability within the organization.
- Provides a detailed account of approved financial activities.
- Strengthens internal controls.
Difference Between Source Document and Voucher
A source document is the original evidence of a transaction, like an invoice or receipt, recording its details. A voucher is an internal document used for authorizing and summarizing the transactions based on source documents.
| Aspect | Source Document | Voucher |
| Purpose | Proof of transaction | Validation and authorization |
| Generated By | External parties (e.g., supplier) | Internal processes |
| Types | Invoices, receipts, purchase orders | Cash vouchers, journal vouchers |
| Role in Accounting | Initiates transaction recording | Ensures accuracy before recording |
How Are Source Documents and Vouchers Used in Accounting?
Source documents and vouchers are the basis of accounting because they form the original and primary evidence of business transactions. Source documents, comprising things like invoices, receipts, purchase orders, and bank statements, form the initial record of a transaction’s occurrence that includes important information like date, amount, and parties.
These documents are essential for verifying the origin of transactions and ensuring financial regulation compliance. Vouchers are internal documents prepared to authorize and process these transactions. Usually, they contain a summary of the source document information along with approvals by responsible personnel. They form the core of an accurate and transparent accounting system, and with them traceability and accountability will prevail in financial reporting.
Role of Vouchers
- Approval Process: Ensures all transactions meet organizational policies.
- Error Mitigation: Prevents inaccurate entries by validating data.
- Internal Controls: Strengthens accountability within departments.
Conclusion
The Difference Between Source Document and Voucher highlights their complementary roles in accounting. While source documents provide the initial evidence for a transaction, vouchers ensure its authenticity and approval before it is recorded. Both are indispensable for maintaining financial accuracy and upholding transparency in business operations.
Difference Between Source Document and Voucher FAQs
What is the primary role of a source document?
A source document provides initial evidence of a transaction and serves as a reference for recording it in the books of accounts.
Can a voucher exist without a source document?
No, a voucher typically relies on a source document as its basis to validate and authorize the transaction.
What are the common types of vouchers used in accounting?
Common types include cash vouchers (for cash expenses) and journal vouchers (for adjustments or corrections).
How do source documents support audit processes?
Source documents provide a verifiable trail of transactions, making them essential for auditing and ensuring regulatory compliance.
Why are both source documents and vouchers necessary in accounting?
Source documents initiate the process, and vouchers validate and authorize transactions, ensuring accurate and transparent financial records.
