Journal Voucher

Journal voucher is an accounting form coded AGF no. 10 for the use of recording government financial transactions. Journal voucher is a primary document of government offices which is used for keeping the systematic & chronological record of financial transactions under the prescribed format of office of the auditor general. It is known as the primary book of accounts because all the financial transactions of government offices are first of all recorded on it. It is also called the book of original entry. It is prepared by following the principles of the double-entry book-keeping system. It records every transaction showing its debit and credit accounts and helps to prepare ledger. It is used by central level as well as operating level offices for recording financial transactions.

Objectives of Journal Voucher

Journal voucher is an essential document for the government offices. Without preparing journal voucher, the subsequent ledger accounts cannot be prepared. The following are the main objectives of journal voucher: -

• To make systematic and permanent record of financial transactions of government offices in sequential order.
• To show debit and credit accounts of each financial transaction.
• To show financial transactions in sequential order.
• To present detailed information about the financial transactions of government offices.
• To help for preparing ledger and financial statements.
• To help for preparing the subsequent ledger accounts and other necessary financial statements.

Importance and Advantages of Journal Voucher

Journal voucher is important document of government because of the following reasons:

• It keeps the systematic record of financial transactions of government offices.
• It provides information of debit and credit aspects of each financial transactions.
• It acts as an evidence in the future.
• It helps to detect and rectify errors.
• It acts as a basis for preparation of accounts and statements.
• It provides a basis for posting, auditing and reporting of financial transactions.
• It shows debit and credit aspects of each financial transactions by the double entry system of book-keeping.

Considerations for Preparing Journal Voucher

The following points should be considered while preparing journal voucher: -

• Each transaction must be prepared in a separate journal voucher.
• It should be prepared by following the principles of the double-entry book-keeping system.
• Dr. against the debit account and Cr. against the credit account should be written.
• The abbreviation of budget expenditure B.E. must be used immediately after the word Dr. in the case of budget expenditure.
• Related code no. of the budget head should be mentioned.
• Sufficient narration should be given for each transaction.
• The supporting documents should be attached with the journal voucher for its approval.

Rules for Preparing Journal Voucher

The new accounting system follows the double-entry book-keeping system. Under the double-entry system, every

financial transaction of government office has a dual effect. It means each transaction involves, at least, two accounts. One aspect of the transaction is debited whereas another aspect is credited. Accounts are debited and credited by following certain rules. Journal voucher is prepared by following such rules. The rules of debit and credit are as follows:

Rules based on Types of Account

Under the double- entry system, the accounts are classified into three types as a personal account, real account, and nominal account. There are separate rules for debit and credit which are as follows:

Personal account
A personal account is an account, which is related to an individual or an organization. This account is created when transaction related to a person or an organization. The rule of debit and credit under personal account is as follows:
Debit the receiver
Credit the giver

Real account
A real account is an account, which is related to asset or property. It is created when the transaction is related to asset or property. The rule of debit and credit under real account is as follows:
Debit what comes in
Credit what goes out

Nominal account
A nominal account is an account, which is related to incomes and expenses. It is created when the transaction is related to incomes and expenses. The rule of debit and credit under nominal account is as follows:
Debit all expenses and losses
Credit all incomes and profits

Rules based on Accounting Equation

The accounting system is a statement of equality between the three basic elements of financial transactions which are assets, capital, and liabilities. Each and every financial transaction has a dual effect. However, the total of assets is always equal to the sum of capital and liabilities. The rule is as follows:

• Debit increase in assets and expenses
• Debit decrease in capital, income, and liabilities.
• Credit increase in capital, income, and liabilities.
• Credit decrease in assets and expenses

Types of Journal Voucher

Generally, operating level offices prepare the following types of journal vouchers:

• Journal voucher for budget expenditure
• Journal voucher for advance transactions
• Journal voucher for miscellaneous transactions
• Journal voucher for the yearly closing

Things to remember

• Journal voucher is an accounting form coded AGF no. 10 for the use of recording government financial transactions. 
• Journal voucher is a primary document of government offices which is used for keeping the systematic & chronological record of financial transactions under the prescribed format of office of the auditor general. 
• The new accounting system follows the double-entry book-keeping system.

• It includes every relationship which established among the people.
• There can be more than one community in a society. Community smaller than society.
• It is a network of social relationships which cannot see or touched.
• common interests and common objectives are not necessary for society.

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