Documents that are used for business transactions and their format

Documents that are used for business transactions and their format

What are the Sources of Business Transactions and Related Documents?


In modern business, there are endless transactions happening every day. The transactions must be properly saved in order to determine the correct business outcome.

One or more documentary evidence is shown in support of each transaction. These carry the evidence of transactions.

For Example, Any business person can make multiple transactions within one day. Goods sold, goods Purchased, return of purchased goods, return of sold goods, depending on money or withdrawing the same in a bank are such transactions may occur regularly in a business.

In addition, these events are actually the main source of transactions. It is impossible to memorize transactions made during the whole calendar year. The transactions are therefore to be recorded correctly in the account books.

Whenever an accountant wants to record the transactions, they must prepare such documents. These documents are vouchers, Cash Memos, Bills, Debit Notes, Credit Notes, VAT invoices, Vouchers, etc.

There are two types of documents that are widely used for business transactions.
i. Primary Documents 

The document that is obtained from the source as soon as the transaction takes place is called the primary document of the transaction. The primary documents are 

  1. Invoice
  2. Cash Memo
  3. Debit Note
  4. Credit note 
  5. Vat Invoices

ii. Final Documents 

The final document of the transaction is the voucher. The final document or voucher is made based on the primary document. However, there is no primary document for journal vouchers. This is because journal vouchers are only needed for cashless transactions. Final Documents are

  1. Debit Voucher
  2. Credit Voucher
  3. Journal Voucher


Documents that are used for business transactions are presented below
Documents that are used for business transactions and their format

The explanation, Specimen copy and use of these documents are described here.


Primary Documents:
1.Invoice

Invoice is documentary evidence of the purchase and sale of goods. When a sales representative sells goods, he delivers a written document mentioning the full details of the goods in it. This written document is called an invoice. 

Buyer’s name & address, Quantity of goods, Description of goods, the value of goods and terms of payment, etc. are mentioned in the invoice. 

Seller considers it as an outward invoice and buyer as an inward invoice. On behalf of this invoice, a buyer prepares a purchase Journal and a seller prepares the Sales Journal.

Sample of Invoice

Documents that are used for business transactions and their format

2. Cash Memo 

A Cash memo is given at the time of cash sale. Usually, the seller gives his customer a cash memo. Usually, the name and the address of the shop are written on top of the cash memo. 

Referring to the name of sold goods, quantity, rate, total value, net value, commission, etc. a seller hands over the cash memo to a buyer with his signature. The cash memo is generally prepared in triplicate.

Sample of Cash Memo

Documents that are used for business transactions and their format


3. Debit Note: 

If the products purchased are returned to the vendor because of the lower quality or because the order letter does not comply with them, the buyer shall write up a note specifying the quantity and cost and value and the reasons for the product’s return. 

The note is then sent to the seller along with the goods and the supplier is informed of this note that his account has been debited with that amount due to those returned goods. This note is called a debit note. Usually, the Buyer prepares a debit note.

Sample of Debit Note

Documents that are used for business transactions and their format

4. Credit Note: 

When the seller receives the returned goods from the purchaser, he sends a note to the purchaser indicating the amount, value, etc. of the goods identified and tells the purchaser that his account has been credited with the value of the returned goods. This note is called a Credit Note.

Sample of Credit Note

Documents that are used for business transactions and their format

5. VAT Invoice:

Value Added Tax or VAT is a tax on the value of goods or services taxable by a person or organization. 

The government collects VAT from the product dealer or service provider. In accordance with the law, the seller of goods prepared a VAT invoice as a predefined government format.

Sample of VAT Invoice

Documents that are used for business transactions and their format

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Final Documents
1. Voucher

The documentary evidence, which is used for transactions, is known as a voucher. For Example, the seller gives a voucher to its buyer for goods sold $3,000. Again, a property owner gives a voucher to its tenants after receiving rent $ 500.
The voucher is of two types. They are:

1.1  Debit Voucher
1.2  Credit Voucher
1.1 Debit Voucher

A debit voucher is used for the purchase of goods and for various types of expenses. It is recorded in the payments side of the cash book or cash register attaching an invoice, a cash memo with a consecutive serial number.

Sample of Debit Voucher

Documents that are used for business transactions and their format



1.2 Credit Voucher

The voucher which is used for the sale of goods and income received, is called a credit voucher. After attaching the invoice, Cash memo, etc. with the credit voucher, it is recorded with a consecutive serial number on the debit side (Receipts side of Cashbook).

Sample of Credit Voucher

Documents that are used for business transactions and their format



2. Journal Voucher 

A journal voucher is used to record all types of transactions. Therefore, vouchers in which cashless transactions are recorded are called journal vouchers.

The journal voucher mentions the voucher number in the specific cell of the ledger so that you can find the voucher for future references. Some examples of cashless transactions are depreciation, asset depreciation, unpaid debt reserves. 

Sample of Journal Voucher

Documents that are used for business transactions and their format



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