Book-keeping and Documentation
Book-keeping and documentation tests how source documents become accounting records and how records are kept audit-ready. The exam emphasises vouchers, cash book, reconciliation and retention.
Core rules
- Book-keeping records routine transactions; accounting interprets and reports them.
- Source documents include invoices, receipts, debit/credit notes, cheques and vouchers.
- A voucher must show date, amount, accounts, narration and authorised signature.
- The cash book records cash receipts and payments; petty cash covers small expenses.
- Bank reconciliation explains differences between the bank statement and cash book.
- Records must be retained as per statutory requirements and protected from tampering.
- A debit note reduces a payable; a credit note reduces a receivable.
Worked example
The cash book shows ₹11,500 and the bank statement ₹12,000. A customer’s cheque of ₹500 was deposited but not yet credited. Reconciliation: bank statement ₹12,000 − unpresented cheque ₹500 = cash book ₹11,500. Reasoning: timing differences are not errors.
Traps that cost marks
- Recording transactions without a supporting voucher.
- Treating a bank reconciliation difference as a fraud without investigation.
- Discarding records too early.
- Mixing personal and business cash.