Source Documents and their importance in accounting / Bookkeeping.


A source document is an original document that contains information/details about a transaction.

Key information that a source document must have are:

  • Date
  • Parties involved
  • Amount
  • The substance of the transaction

Other Information a source document might have are:

  • Tax Number (if applicable)
  • Prenumbered Serial Number (better to have this, it helps to find the missing number)

Why Source Documents are Important:

Source documents are the evidence of a business transaction. It is the source document that will provide information about which account to Debit and which account to Credit, what amount to debit and what amount to credit, and on which date this transaction happened.

You must have documentary proof of everything you enter into the accounting system. There must be a strong base for every figure inside the accounting system.

Some of Source Documents:

  • Cash Memo
  • Invoice
  • Bill
  • Receipt
  • Debit Note
  • Credit Note
  • Check Deposit slip
  • Credit ‘Card slip

When the audit is conducted, the auditor reaches the source document to ascertain the accuracy and authenticity of any transaction.

Even in case of any dispute, the court of law will ask for source documents.

In short, Accounting is based on Source Documents. No Source Document – No Accounting. Period

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