Question
What's source document in accounting
Answers
GPT-4o mini
In accounting, a source document is a fundamental piece of evidence that provides the details of a business transaction. It serves as the original record of the transactions that are later recorded in the accounting system. Source documents are crucial for maintaining accurate financial records, as they provide the necessary substantiation for the entries in the accounting books.
Common types of source documents include:
1. **Invoices**: Issued by sellers to buyers, detailing the goods or services provided and the amount owed.
2. **Receipts**: Proof of payment received for goods or services.
3. **Purchase Orders**: Requests made by a buyer to a seller for the purchase of goods or services.
4. **Bank Statements**: Records provided by banks that show all transactions, including deposits and withdrawals.
5. **Contracts**: Legal agreements between parties that outline the terms of a transaction.
6. **Time Sheets**: Records of hours worked by employees that support payroll entries.
7. **Credit Memos/Debit Memos**: Documents used to adjust the amounts on invoices, reflecting returns or corrections.
These documents are essential for internal controls, auditing, and ensuring compliance with regulations. They help in tracing back transactions for verification and analysis, thus playing a key role in financial reporting and accountability.
Common types of source documents include:
1. **Invoices**: Issued by sellers to buyers, detailing the goods or services provided and the amount owed.
2. **Receipts**: Proof of payment received for goods or services.
3. **Purchase Orders**: Requests made by a buyer to a seller for the purchase of goods or services.
4. **Bank Statements**: Records provided by banks that show all transactions, including deposits and withdrawals.
5. **Contracts**: Legal agreements between parties that outline the terms of a transaction.
6. **Time Sheets**: Records of hours worked by employees that support payroll entries.
7. **Credit Memos/Debit Memos**: Documents used to adjust the amounts on invoices, reflecting returns or corrections.
These documents are essential for internal controls, auditing, and ensuring compliance with regulations. They help in tracing back transactions for verification and analysis, thus playing a key role in financial reporting and accountability.