Source Document

Welcome to class!

In today’s class, we will be talking about Source Document. Enjoy the class!

What is a source document?

A source document is those document that contains all information’s on the goods and services bought, sold, or paid for by a business. It is the original record of transaction.it states the basic facts of the transaction such as its date, purpose (description of a transaction), the quantity of the goods exchanged, amount of money involved, name of the seller and buyer and so forth.

Uses of source documents

It is used for:

record purposes.
accounting purposes.
auditing purposes.
legal purposes

Types of sources documents

The types of sources documents include the following:

Purchase order
Cash receipt
Invoice
Cash register
Tapes
Credit
Debit note
Deposit ships
Withdrawal slips
Cheque

Purchase order:

This is a statement sent by the buyer to the seller. This order may be in the form of a letter or may be prepared on a printed form. Description of the goods to be bought, the amount to be bough, address of delivery, the unit price of items and the delivery date must be changed to show on the order.

Cash receipt:

This is written or printed acknowledgement on a piece of paper that money has been received. It is referred to as sales slips. It shows the date of payment, the person who made the payment, the amount and the signature of the receiver.

Cash register tapes:

A cash register is a machine for a quick, easy and accurate transaction. Each item sold is clearly indicated and the prices totalled-up. This is registered on the tape and at the end of the day, becomes a source document.

Cash register book:

At the end of the business day, entries are made into a cash register book from the receipt books. These are found in stores or shopping malls with a large volume of sales

Invoice:

It is a document prepared by the seller and sent to the buyer of goods or services. An invoice shows the items of sales, the number of goods sold, description of the supplier, discount granted etc. it is mostly prepared in duplicate. It also serves as a receipt.

Credit note:

A credit note is a document prepared and sent by the seller to the buyer for goods or not as ordered.

Debit note:

This is written out by the seller to the buyer to correct an undercharge or when goods are not charged on the invoice.

Deposit and Withdrawal slip:

These are commonly found in banks and some other financial institutions. Whenever a customer wants to lodge in money into an account, he makes use of a deposit slip issued by the bank. If on the other hand, he or she wishes to withdraw money from a savings account, a withdrawal slip of the bank is filled and presented to the cashier.

Cheques:

A cheque is a negotiating instrument instructing a bank to pay a specified sum of money to the person whose name is written on it. Money can be withdrawn either by the account holder authorizes to withdraw. A cheque can be crossed or open.

A cross cheque is a cheque that has two parallel lines drawn with or without any words, generally on the left-hand top corner or the middle of the cheque. A crossed cheque is payable only through a collecting banker and not directly at the counter of the bank.

In our next class, we will be talking about the Journal. We hope you enjoyed the class.

Should you have any further question, feel free to ask in the comment section below and trust us to respond as soon as possible.