Source Documents PDF

Summary

Source documents are original records used to support business transactions, providing proof of transactions, aiding in tax prep and audits, and improving efficiency and transparency within accounting systems. This document provides a general overview covering various source document types such as checks, invoices, receipts, purchase orders, sales orders, and cash vouchers.

Full Transcript

SOURCE DOCUMENTS BY KARTIKEY JOSHI VISHAL BHAI SOURCE DOCUMENTS Source documents are original records that include the information supporting or substantiating business transactions recorded in the accounting system. They offer tangible proof that a transaction occurred. Moreover, they serve...

SOURCE DOCUMENTS BY KARTIKEY JOSHI VISHAL BHAI SOURCE DOCUMENTS Source documents are original records that include the information supporting or substantiating business transactions recorded in the accounting system. They offer tangible proof that a transaction occurred. Moreover, they serve as evidence for tax preparation and audit procedures, thus streamlining operations and improving transparency. 2 COMMON TYPES OF SOURCE DOCUMENTS Checks Invoices Receipts Purchase Order Sales Order Cash Voucher CHECKS A check is a written order written by a depositor instructing the bank to pay a specific amount to a recipient from the depositor's bank account. In other words, a check is a way to tell a bank to transfer money from your bank account to someone else personally or someone else's bank account. INVOICE An invoice is a time-stamped commercial document that itemizes and records a transaction between a buyer and a seller. If goods or services were purchased on credit, the invoice usually specifies the terms of the deal and provides information on the available payment methods. Types of invoices may include a paper receipt, a bill of sale, a debit note, a sales invoice, or an online electronic record. 5 RECEIPTS A receipt is a written acknowledgment that something of value has been transferred from one party to another. Receipts are issued to consumers from vendors and service providers, used in business-to-business transactions, or provided with banking or financial market trades. PURCHASE ORDER A purchase order is a commercial source document that is issued by a business’ purchasing department when placing an order with its vendors or suppliers. The document indicates the details on the items that are to be purchased, such as the types of goods, quantity, and price. In simple terms, it is the contract drafted by the buyer when purchasing goods from the seller. 7 SALES ORDER A sales order is a document generated by the seller specifying the details about the product or services ordered by the customer. Along with the product and service details, sales order consists of price, quantity, terms, and conditions etc. 8 CASH VOUCHER A cash voucher is a standard form used to document a petty cash payment. When someone wants to withdraw cash from the petty cash fund, that person fills out the cash voucher to indicate the reason for the withdrawal, and receives cash from the petty cash custodian in exchange. If the person requesting cash is doing so because he or she wants reimbursement for an expense they already paid for from their own funds, then they should also staple the relevant receipt from the original purchase transaction to the cash voucher. The vouchers are then stored as accounting records. 9 THANK YOU!

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