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What is a source document in accounting?
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Dec 7, 2023 · A source document is the original document that contains the details of a business transaction. Learn how to store, use, and retain source documents for accounting, auditing, and legal purposes.
A source document is a physical or electronic document that records the details of a business transaction. Learn what source documents are, how they are used in accounting, and see some common examples.
- Importance of Source Documents
- Common Types of Source Documents
- Document Storage
- Originality of Source Documents
- More Resources
Source documents are, first and foremost, important to the bookkeeping and accounting processbecause they serve as physical evidence that a financial transaction actually occurred. Nowadays, these documents do not necessarily need to be a physical hard copy – they may be in a traceable electronic form. In addition, source documents are also essenti...
In its simplest form, a source document generally contains the following information: 1. The date of the transaction 2. The total amount of the transaction 3. A description of the transaction 4. One or more authorizing signatures The most common documents are: 1. Checks 2. Invoices 3. Receipts 4. Credit memos 5. Employee time cards 6. Deposit slips...
Any information generated through source documents should be properly recorded in either the company’s journal, accounting software, or financial books. After the initial recording, all documents should be preserved and organized into a file and put into a system so they can be retrieved at any time. It is also important to make a record of general...
In the majority of cases, photocopies of source documents are legally permissible. According to the US Internal Review Service (IRS), as long as these photocopies are complete, legible, and accurate representations of the original document, they are legally acceptable. Similarly, the Canadian Revenue Agency(CRA) accepts scanned documents as long as...
CFI is the official provider of the Financial Modeling and Valuation Analyst (FMVA)™certification program, designed to transform anyone into a world-class financial analyst. To keep learning and developing your knowledge of financial analysis, we highly recommend the additional CFI resources below: 1. Accounting for Income Taxes 2. Analysis of Fina...
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. The term source documents in accounting refers to this paper trail.
Nov 21, 2023 · 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...
A source document is an original record which contains the detail that supports or substantiates a transaction that will be (or has been) entered in an accounting system. In the past, source documents were printed on paper. Today, the source documents may be an electronic record. Examples of Source Documents. A few examples of a company’s ...
Source documents are those records. They are the only real evidence of a transaction taking place, on a specific day and at a specific amount. If source documents don't exist for a transaction - because they've been lost or thrown away or not recorded in the first place - then accounting for the transaction becomes difficult.
