Voucher System

Voucher system is an important tool to summarize all the cash expenditures in the entity. No matter for what purpose the expenditure is done, all cash transactions are recorded using the voucher system. In a voucher system, following things are maintained:

  • Vocuher
  • Voucher register
  • Check register
  • Paid voucher file
  • Unpaid voucher file

Journal Entry

Voucher Register

When stock is bought on cash

Purchases

   Voucher payable

When stock is bougt on credit terms.

Purchases

   Voucher payable

In case of purchase return

Voucher payable (old)

   Purchase return

   Voucher payable (New balancing)

In case of expenses incurred 

Expenses

Voucher payable

Debit

xxx

 

 

xxx

 

 

xxx

 

 

 

xxx

Credit

 

xxx

 

 

xxx

 

 

xxx

xxx

 

 

xxx 

 

Check Register

When cash is paid against purchases on cash

Voucher payable

   Cssh

When check is issued for credit purchase

Voucher payable

   Bank

   Purchase discount

 

Debit

xxx

 

 

xxx

 

Credit

 

xxx

 

 

xxx

 xxx

 

 

James & Co is involved in chemical manufacturing industry. It supplies various types of chemicals to major detergent manufacturing companies in the region. It uses voucher accounting system. Here are some of the transactions during the month of January. 2016:

Jan 01

 

Jan 05

Jan 10

Jan 15

 

 

Jan 18

Jan 20

Jan 22

Jan 25

Jan 28

Jan 30

Prepared voucher no 401 for $ 60,000 payable to Santa & Co for equipment purchased on terms 2/10,n/30.

Prepared voucher no 402 for $ 40,000payable to David & Co for purchased of inventory on terms 1/10, n/30.

 Issued check no 501 in payment of voucher no 402.

Prepared voucher no 403 for $ 8,600 to replenish the pretty cash fund for following disbursement:

Selling expenses $ 3,000; Supplies $ 4,000; General expenses $ 1,600

Issued check no 602 in payment of voucher no 403.

Issued check no 603 in payment of voucher no 401.

Prepared voucher no 404 for $ 4,000 payable to Natalia for advertisement.

Issued check no 604 in payment of voucher no 404.

Prepared voucher no 405 for $ 16,000 payable to office labor for Jan 2016 wages.

Prepared voucher no 605 in payment of voucher no 405.

Requirement

Journalize the above transactions in:

  • Voucher register
  • Check register

Solution

James & Co.

Voucher Register

General Journal Entries

 

Date

Description

Debit

Credit

Jan 01

Equipment

Voucher payable (no 401)

60,000

60,000

Jan 05

Purchases

Voucher payable (no 402)

40,000

40,000

Jan 15

Selling expenses

Supplies

General expenses

Voucher payable (no 403)

3,000

4,000

1,600

8,600

Jan 22

Advertisement expenses

Voucher payable (no 404)

4,000

4,000

Jan 28

Wages expenses

Voucher payable (no 405)

16,000

16,000

James & Co.

Check Register

General Journal Entries

Date

Description

Debit

Credit

Jan 10

Voucher payable (no 402)

Bank

Discount received

40,000

39,200

800

Jan 18

Voucher payable (no 403)

Bank

8,600

8,600

Jan 20

Voucher payable (no 401)

Bank

60,000

60,000

Jan 25

Voucher payable (no 404)

Bank

4,000

4,000

Jan 30

Voucher payable (no 405)

Bank

16,000

16,000

 

Question

Sami & Co is involved in selling electronic items such as TV, AC, and Refrigerator etc. Following are the transactions for the month of March:

  1. Purchased fixtures amounting to $ 120,000 paying cash $ 50,000 and signing a note for the balance.
  2. Sami & Co. Issued a 10% 30 day note of $ 100,000 and paid $ 50,000 in settlement of a voucher payable $144,000.
  1. Sami also issued a 12 % 60 day note in settlement of an outstanding voucher for $44,000.
  2. Inventory purchased for $ 90,000 from Darren and issued a voucher payable.

Required

As a chief accountant, you are required to pass on the journal entries in voucher register, cheque register and general journal.

Solution

Sami & Co.

Voucher Register

Date

Particulars

Debit

Credit

1

Fixture

Voucher payable

Voucher payable

60,000

 

25,000

35,000

2

Voucher payable

Interest expense

Voucher payable

Voucher payable

72,000

3,000

 

 

50,000

25,000

3

Purchase

Voucher payable

45,000

 

45,000

 

Sami & Co.

Cheque Register

Date

Particulars

Debit

Credit

1

Voucher payable

Cash

25,000

 

25,000

2

Voucher payable

Cash

25,000

 

25,000

 

Sami & Co.

General Journal

Date

Particulars

Debit

Credit

1

Voucher payable

Notes payable

35,000

 

35,000

2

Voucher payable

10 % notes payable

50,000

 

50,000

3

Voucher payable

12 % notes payable

22,000

 

22,000

 

Voucher System Question

Tobia bason is a well known business name In the fashion industry. The accountant uses voucher system for all expenditure. You are required to record t he following transactions using voucher register and cheque register in the books of Tobia bason.

  1. Tobia issued cheque number 174 for $ 40,000 to pay off outstanding voucher number 199.
  2. Tobia issued cheque number 175 for developing petty cash fund amounting to $ 10,000 vide voucher number 201.
  3. Bought inventory for $ 42,000 from Alice on credit vide voucher number 202. For inventory management, Tobia exercises perpetual inventory system.
  4. Inventory returned amounting to $ 1,000 to Alice vide voucher number 203.
  5. Tobia issued cheque number 176 to pay off voucher number 203 after deductions of 2 % cash discount.
  6. Tobia issued cheque number 177 amounting $ 10,000 as a travel advance to a staff vide voucher number 204.
  7. Tobia signed a 10 % note of 60 days maturity of $ 24,000 to pay off outstanding voucher number 200.
  8. Tobia issued cheque number 178 for $ 31,200 to settle note payable including interest $ 600 (voucher number 205).
  9. Tobia issued cheque number 179 for $ 400 in order to reimburse the travel expenses incurred by the employees in excess of travel advance.
  10. Tobia issued cheque number 800 to reimburse the deficiency in the petty cash fund for conveyance expense $ 2,200, supplies expense $ 3,200 & entertainment expense $ 2,800 vide voucher number 207.

Solution

Tobia Bason

Cheque Register

Date

Particulars

Debit

Credit

1

Voucher payable

Cash

Paid voucher no. 199

40,000

 

40,000

2

Voucher payable

Cash

Paid voucher no. 201

10,000

 

10,000

3

Voucher payable

Purchase discount

Cash

Paid voucher no. 203 

40,000

 

800

39,200

4

Voucher payable

Cash

Paid voucher no. 204

10,000

 

10,000

5

Voucher payable

Cash

Paid voucher no. 205

31,200

 

31,200

6

Voucher payable

Cash

Paid voucher no. 206

400

 

400

7

Voucher payable

Cash

Paid voucher no. 207

8,200

 

8,200

 

Tobia Bason

 Voucher Register

Date

Particulars

Debit

Credit

1

Petty cash fund

Voucher payable

To prepare voucher number 201 for petty cash fund.

10,000

 

10,000

2

Purchase

Voucher payable

To prepare voucher number 202 for purchased inventory.

42,000

 

42,000

3

Voucher payable

Purchase return

Voucher payable

To prepare voucher number 203 for after return inventory.

42,000

 

2,000

40,000

4

Prepaid traveling expense

Voucher payable

To prepare voucher number 204 for advance travelling expense.

10,000

10,000

5

Notes payable

Interest expense

Voucher payable

To prepare voucher number 205 for notes payable.

30,000

1,200

 

 

31,200

6

Traveling expense

Voucher payable

To prepare voucher number 206 for traveling expense.

400

 

400

7

Supplies expense

Conveyance expense

Entertainment expense

Voucher payable

To prepare voucher number 207 for various expenses.

3,200

2,200

2,800

 

 

 

8,200

 

Question

Noor & Co is a well known name in the perfume selling industry. In the last f ew years, it has achieved significant growth due to its innovative marketing tactics and strategy. That is why, it is regarded as the company of the year award in 2014. Noor & Co uses voucher system to account for its transactions. You are required to pass on the journal entries in the voucher register and in cheque register to complete the bookkeeping requirements. Following are the transactions for the month of June, 2014:

June 1

The company purchased a machinery from Alvin on credit terms of 3/10, net 30. For this, it issued voucher number 448 for $ 80,000 payable to Alvin.

June 5

 Noor & Co purchased merchandise inventory from Samsil on credit terms of 2/10, n/30. At the time of purchase, voucher number 449 was prepared for $ 70,000 payable to Samsil.

June 7

The company issued cheque number 303 to pay off voucher number 448.

June 10

Accountant prepared voucher number 450 for $ 9,600 to fund the petty cash that is to be used for entertainment 2,600, supplies 4,400, janitorial expenses 2,000 and courier charges 600.

June 20

Accountant issued cheque number 304 against voucher number 449 due to lapse of discount period.

June 25

Owner’s drawing $ 10,000 recorded by voucher number 451.

June 27

Against voucher number 451, cheque number 305 was issued.

June 28

Accountant prepared voucher number 452 of $ 20,000 as payroll payable to employees for the month of June 2014.

June 31

Cheque number 306 was issued to make payment against voucher number 452.

 

Answer

Noor & Company

Voucher Register

Journal entries

Date

Particulars

Debit

Credit

June 1

Machinery

Voucher payable

Prepared voucher number 448 for machinery purchased.

77,600

 

77,600

June 5

Purchase

Voucher payable

Prepared voucher number 449 for purchase of inventory.

68,600

 

68,600

June 10

Entertainment expense

Supplies expenses

Courier expenses

Janitorial expense

Voucher payable

Prepared voucher number 450 for petty cash expenses.

2,600

4,400

600

2,000

 

 

 

 

9,600

June 25

Drawing

Voucher payable

Prepared voucher number 451 for drawing.

10,000

 

10,000

June 28

Payroll expenses

Voucher payable

Prepared voucher number 452 for salaries.

20,000

 

20,000

 

Noor & Company

Cheque Register

Journal entries

Date

Particulars

Debit

Credit

June 7

Voucher payable

Cash

Issued cheque number 303 to make payment against voucher number 448.

77,600

 

77,600

June 20

Voucher payable

Purchase discount

Cash

Issued cheque number 304 for making payment against voucher number 449.

68,600

1,400

 

 

70,000

June 27

Voucher payable

Cash

Issued cheque number 305 for the payment against voucher number 451.

10,000

 

10,000

June 30

Voucher payable

Cash

Issued cheque number 306 for making payment against voucher number 452.

20,000

 

20,000