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Cash Basis of Accounting : Under this method only cash transactions are recorded in the books of
accounts. Entries are made only if cash is received or paid.

Accrual Basis of Accounting :

Under this method all transactions are recorded in the books of accounts (Cash and Non-Cash).
Entries are made on the Accrual basis, it means cash and Non-cash both transactions are
recorded in the books of accounts.

Source Documents

Source of Documents

All financial transactions are recorded in the books of accounts on the basis of source document or
on the basis of some evidence. Source documents are helpful to prove that a transaction is actually
made or not.

Cash Memo : Cash Memo is A bill of sale, it is a written document by a 'seller' to a purchaser,
reporting that on a specific date, a particular sum of money or other "value received",

Invoice or Bill : When goods are sold on credit, An invoice or bill is issued on the name of the
buyer, indicating the products, quantities, and agreed prices for products or services, the seller has
provided the buyer.

Receipt : A receipt is a written acknowledgment that a specified a sum of money has been
received from the customer as an exchange for goods or services. The receipt is evidence of
purchase of the goods or service.

Pay-in-Slip : Pay in slip is a form that is filled when the money is deposited by a customer in to his
bank account.

Cheque : A cheque is a document (usually a piece of paper) that orders a payment of money. The

person writing the cheque, the drawer, usually has a account where the money is deposited.

Debit Note : When we return goods back to the supplier, a debit not is made on the name of
supplier, it means his account his debited. Debit Note proves that a debit entry has been made to a
debtor's or creditor's account.

Credit Note: When we receive goods back from our customer, then a credit not is made on the
name of the customer, it means customer’s account is credited.

Meaning of Voucher : Voucher is the documentary proof or evidence in support of a transaction.
For example when we purchase goods for cash, we get cash memo, and when we purchase goods
on credit, we get an invoice, when we make payment we get Receipt.