Source document definition — AccountingTools (2024)

FAQs

What is the definition of source document in accounting? ›

In accounting, the definition of a source document is a piece of paper that proves that a transaction has occurred. Source documents contain pertinent information about the transaction, such as the date, the dollar amounts, the involved parties, and the purpose of the transaction.

A source document identifies and describes transactions and is the basis for entering an event into the accounting system.

Source Document. : anything that provides proof that a transaction occurred. Check. : a business form ordering a bank to pay cash from a bank account (pay with cash) Invoice.

Typical source documents include sales invoices, cash receipts, cash register slip, credit notes and deposit slip.

The chart of accounts is not a source document but it is a listing of all accounts in the accounting system such as cash, accounts receivable, and inventory.

Source documents are the “documentary evidence” and the accounting process relies upon this evidence to prove (substantiate) the financial transactions entered. When businesses sell or purchase items and money is received or spent, the source documents are the proof that a transaction has actually occurred.

“A primary source is firsthand testimony or direct evidence concerning a topic under investigation. The nature and value of a source cannot be determined without reference to the topic and questions it is meant to answer.

Once your research paper is complete you may need to create a Bibliography or List of Works Cited. To cite a source means to give credit for the original source of information, an idea, or way of articulating an idea. It is a standardized method of acknowledging resources used in your research.

any thing or place from which something comes, arises, or is obtained; origin: Which foods are sources of calcium? the beginning or place of origin of a stream or river.

Source documents in an accounting system include payroll records, checks, purchase orders, and sales receipts. They are the original records of a transaction. An employee speeding ticket is not considered a source document.

Is source document a ledger? ›

They are often external documents like purchase invoices but can also be internally generated documents like sales tickets, purchase orders, and checks. However, the ledger is not a source document, it is an accounting record in which the transactions recorded from the source documents are summarized per account.

Answer and Explanation:

The source documents can be in the form of receipts, invoices, statements, or checks containing details of the transaction such as the date, amount, and description of the transaction.

Source documents are an internal document that act as tangible evidence of a business deal. They function by giving the bookkeeping process a reference point. A paper trail is created each time a business engages in a financial transaction.

Documents provide a financial record of each event or activity, and therefore ensure the accuracy and completeness of transactions. This includes expenses, revenues, inventories, personnel and other types of transactions.

An invoice is a source document that shows all details of the sale, including payment terms. These details are entered as a sales invoice by the seller, and a purchase invoice by the buyer. Payment and remittance advice mark the invoice as being paid, detailing the amounts and invoice numbers.

Common source documents are participant medical records, phone encounters or notes, lab and diagnostic test results, participant diaries and specific research worksheets used to document key research data elements. If data are entered directly into a computer system, the electronic record is considered the source.

The accounting records business transaction which is the source of generating information. Proper accounting system makes information more reliable. Accounting ensures it is a reliable source of information.

Answer and Explanation:

Examples of source documents are; a. sales tickets, checks, purchase orders, and bank statements. A ledger is not a source document it is defined as an account that summarizes the transactions posted in various journals.

A citation identifies for the reader the original source for an idea, information, or image that is referred to in a work. In the body of a paper, the in-text citation acknowledges the source of information used. At the end of a paper, the citations are compiled on a References or Works Cited list.