These documents are required for audit and tax assessments. They also serve as the legal evidence in case of a dispute. The following are the most common source documents:
1- Cash Memo:
When a trader sells goods for cash, he gives a cash memo and when he purchases goods for cash. He receives a Cash Memo. Details regarding the item , quantity , rate and the total price is mentioned in the Cash Memo. Cash transactions are recorded in the books of accounts on the basis of these cash memos. Specimen of a cash memo is give on the next line:
|3||Titan Regalia D 06||2,300||6,900|
|2||Titan Raga 108||2,700||5,400|
|less discount 10%||1250|
2- Invoice and Bill:-
When a trader sells goods credit, he prepared a sell invoice which contains the name of the party to whom the goods are sold , the rate, quantity and total amount of sale. The original copy of the sale invoice is send to the purchaser and its duplicate copy and kept for making records in other books of accounts. When a trader purchases goods and credit , he receives a credit bill from the supplier of goods.