Journal Voucher Basics and its importance in Accounting and Bookkeeping
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What is a Journal Voucher? Journal voucher accounting methods and procedure: How to prepare journal voucher? Author: Ckrishwa
Journal voucher is an important accounting form in accounting, bookkeeping for any business or company.
Mostly the necessity for preparing journal voucher arises when there is an adjustment for the amount already paid in advance to the suppliers or contractors for goods and services of the company or business.
This type of payment arises when there is a need to pay advance to the contractors or suppliers for the supply of goods or services as per the terms and conditions between the company or business and the supplier or contractor.
These advances will be paid on the condition that the amount paid in advance will be adjusted later at the time of final settlement of payment to the contractor or supplier.
Here the necessity of preparing journal voucher arises. While making part payment or advance it will be debited in the suspense account. At the time of final settlement the suspense account will be credited and the relevant head of account like cost of purchase of goods and services will be debited.
Journal voucher is also prepared for rectification of errors in the heads of accounts. When an accountant made a mistake while posting in the General Ledger there is no need to strike the wrong entry and write the correct entry. In accounting principle it is wrong. It means the rectification of error has to be done only through journal voucher.
If there is a wrong debit in the general ledger the wrong debit should be rectified by crediting the wrong head of account and debiting the correct head of account through a journal voucher.
Similarly if there is a wrong credit in the general ledger the wrong credit should be rectified by debiting the wrong head of account and crediting the correct head of account through journal voucher.
All journal vouchers prepared should be entered daily in the journal register. These entries posted in the journal register should be posted in the general ledger head of account wise.
Journal voucher is like a life saving drug to the accountants when they made mistake in the General Ledger.
