Vouching of Payment Side of

Cashbook
Principles of Vouching
by
Nadeem Ishtiaq
Vouching of Payment Side of Cashbook
Separately maintained journal is called Cash
Payment Journal.
Proper authorization of payment
Payment relates to business operations
Acknowledgement of cash received
Necessary documentary evidence
Proper accounting entries
Vouching of Payment Side of Cashbook
1. Cash Purchases
2. Payments to Creditors
3. Wages
4. Salaries
5. Directors Fees
6. Commission of Salesmen &
Agents
7. Traveling Allowance
8. Freight & Carriage
9. Custom Duties
10. Insurance Premium
11. Advertising Expense
12. Bank Charges


13. Bills Payable Paid
14. Bill Receivable Dishonored
15. Investment Purchased
16. Land & Building Purchased
17. Plants Furniture etc.
Purchased
18. Payments Under Hire
Purchase Agreement
19. Loans Advanced by the Client
20. Dividends Paid
21. Partners Drawing
22. Other Expenses
Cash Purchases
Cash Memo issued by the vendor
Acknowledge of cash received by the vendor
Details of goods purchased
Invoice
Proper authorization of purchases
Purchase Requisition
Suppliers Quotation
Purchase Order
Receiving Report
Payments to Creditors
Cash Memo
Acknowledge of cash received
Payments for goods purchased on credit
Vouching of Purchase Book
Payments to suppliers for services (e.g. repair,
consultancy) / Purchase of asset on credit
Vouching of General Journal
All documents in the name of the business
Cash Discount Availed
Proper accounting entries

Wages
Requires careful attention
Misappropriation/Misstatement
Hours worked or pieces produced
Names of dummy workers in wages sheet
Evaluation of internal control system
Test Checking
Detailed Checking
Segregation of Duties
Time spent/Pieces produced
Amount Payable
Payment of Wages
Wages
Wages paid on time spent basis
Record of time spent by gate office
Record maintained by departmental foremen
Wages paid on the basis of pieces produced
Record of pieces produced by foremen
Record kept by storekeeper
Wages
Examination of wages sheet
Names of workers
Acknowledgement of wage received by signature
and thumb impressions
Compare total wages paid with the estimates
by cost department
Comparison with previous months
Salaries
Amount paid as salaries in cashbook
Net salaries payable in payroll register
Increments
Authenticity of increment through approval
Special Payment
Relevant approval letter
Payroll is signed by the Manager/Director
Acknowledge of salary received by the recipient

Directors Fees
Article of Association
Procedure of fixation of directors fees
Fees Fixed by Shareholders
Shareholders Resolution
Fees Fixed by Directors
Minutes of the Meeting of Directors
Commission of Salesmen & Agents
Acknowledge of the recipient
Agreement
Rate of commission
Method of computation of commission
Appropriate documentary evidence
Accuracy of calculations
Proper accounting entries
Traveling Allowance
Not validated by vouchers of actual expense
Paid as per rules of the organization
Travel related to the business purpose
Proper scrutiny of allowance
Signatures of the person who scrutinized the
bills
Authorization of payment
Acknowledge of cash received by recipient
Freight & Carriage
Statements of Account
Acknowledge of cash received
Receipts issued by the freight and carriage
authority
Proper allocation of expense
Custom Duties
Official Receipt
Acknowledge of cash received
Custom Duty paid through agent
Statement of account
Official Receipt
Custom duty paid on a asset is debited to
asset account.
Insurance Premium
Premium paid under new insurance policy
Insurance Policy
Demand Note
Official Receipt
Acknowledge of payment
Premium paid under old policy
Demand Note
Official Receipt
Proper year-end adjusting entries

Advertising Expense
Advertisement through agency
Statement of accounts
Details of newspaper, radio and TV time
Acknowledge of cash received by the Agency
Advertisement directly through media
Statement of accounts
Acknowledge of cash received by the Media


Bank Charges
Bank Charges for checkbooks, bank drafts,
commission & fees etc
Bank Statement
Debit Advice

Bills Payable Paid
Original BOE returned by the payee after
receipt of amount
BOE should be duly cancelled
Acknowledgement of cash received
Bills Receivable Dishonored
Discounted Bill Receivable
Bank Statement
Debit Advice
Bill Receivable not Discounted
Examination of bill
Receipt issued by the notary public

Investment Purchased
Investments e.g. shares, debentures,
securities etc
Brokers Bought Note
Investments are physically examined during
the course of verification of assets.
Land & Building Purchased
Solicitors statement of settlement
Contract of Sale
Acknowledgement of money received by the
vendor
Title Deed
Minutes of Directors Meeting
Proper capitalization of all expenses
Plant, Furniture etc. Purchased
Approval of purchase
Invoice or receipt given by the vendor
Description and price of asset
Proper capitalization of all expenses

Payment Under Hire Purchase
Agreement
Hire Purchase Agreement
Down Payment
Rate of Interest
Future Installments
Principle
Interest
Acknowledgement of cash received issued by
hire-vendor

Loan Advanced by the Client
Authorization to advance loans
Articles of Association
Companies Ordinance 1984
Other relevant statute
Receipt given by the borrower
Loan Agreement
Promissory Note/Bill of Exchange
Stamp Paper
Rate of interest
Dates of Payment of Interest
Repayment of Loan
Security or Mortgage Deed
Dividend Paid
Directors Resolution
Rate & Amount of dividends
Accuracy of calculation
Total amount of dividends
Dividends list
Deposit of Income Tax
Receipted challan of government treasury
Partners Drawing
Partnership Deed
Maximum limit of each partner
Acknowledge of amount received issued by
the partner
Other Expenses
Other expenses e.g. rent, taxes, printing,
stationery, telephone etc
Acknowledgement of cash received
Invoice
Written Contract
Conclusion
For each and every payment
Acknowledge of cash received
Necessary documentary evidence