Journal Voucher Definition

Journal voucher, in easy words, is a document in which is recorded all the necessary elements of an accounting transaction.

There are a number of financial records and documents that a business deals with every day. Each one of them is vital for fluent business transactions. As an HR manager, you should be very clear about any and every financial document, including a journal voucher.

Suppose you are interested in gaining some additional information regarding journal vouchers, so let''s do it.

What is the Meaning of Journal Voucher?

A journal voucher is a basis document that records all financial transactions. In essence, the voucher will carry identification number detailing the voucher, date and a short description of the transaction, a total sum of the transactions, tax if there is any, reference to other evidence, a sign of making a voucher from the person, and also the sign of the authorized person.

Here is when a question arises– why do businesses use journal vouchers? Let''s find answer in the next section.

Purpose of Journal Voucher

First and foremost, businesses use journal vouchers to address and resolve any wrongly recorded business transaction. Plus, they also use the document to keep a check on such transactions that do not involve in.

For some, journal vouchers are used to handle some transactions that do not have any outflow. For example, writing off account balances, depreciation of tangible assets require journal vouchers.

Now you know what is journal voucher and its purpose, let us learn about its uses:

• As I have already said earlier, businesses use it to deal with non-cash and non-trading transactions.
• This document also helps the firms auditors as they get a clear image of the business transactions of an organisation
• Journal vouchers can also be used in the form of evidence for future reference
• It also serves the base of the rectification record.

Advantages of Journal Voucher

There are many but let''s discuss the top advantages of journal vouchers that you must be aware of :

• Business gets all their business transactions through the journal vouchers in chronological order according to the time they occurred
• The document helps the accountants to rectify the errors wherever there are some.
• It also helps the businesses to effortlessly manage their non-cash expenses in the business.
• Journal voucher help to close the account books at the year end
• It gives seamless backup for a reversal of transaction entries
• It helps the businesses to comply effortlessly on the way

Difference Between a Journal Voucher and a Journal Entry

Almost the same and often used in place of each other, the ""Journal voucher"" and the ""Journal Entry."" There is a slight difference because the first one is the start of a financial transaction and the second one is that which is written down in their books of accounts.

Basically, all accounting entries are at one place in a journal, and these entries are referred to as journal entries. The record of such entries is maintained as vouchers. A journal entry is prepared in the notebook.

One journal entry may be simple (only one debit and one credit) or compound (more than one debit and/or credits). All Journal Vouchers look the same. You can get as many journal entries as you wish from one journal voucher.

Thus, after the journal entry is completed, the entries will then be put into the right ledgers. On the other hand, recording the transaction in the system is the next step of the journal voucher.

Frequently asked questions

1. Can you give an example of a voucher?

   Any document vouching for a transaction included in books of accounts can serve as a voucher, be it an invoice, trust deed, salary and wages sheet, or receipt.

2. In what way does a journal voucher differ from other accounting documents?

   In most cases, the journal voucher is not a source document but an auxiliary one. The original documents are taken into account, and a journal voucher provides further information and details about a transaction. Such journal vouchers may be used as a journal entry-an account that comprises a record of a financial transaction that is adjusted directly into the accounting records.

3. What are the most common entries in a journal voucher?

   A journal voucher documents the transaction when assets are written off, depreciated, provided against, purchased or sold on credit, or adjustments are made. It is easily traceable in any financial system. They are generally used in the audit process by accountants.

4. At what time does a Journal voucher used in the process of accounting system?

   Journal voucher ware used to make the recent accounting records, changes and correction in case without other ways to get them into a financial system.