Explain briefly various source documents 19.docx

Source documents refer to the original records or materials that serve as evidence or support for accounting transactions and financial activities within an organization. These documents provide the basis for recording and documenting business transactions accurately. Here are brief explanations of various common source documents:

Sales Invoice: A sales invoice is a document issued by a seller to a customer indicating the details of a sale. It typically includes information such as the date, quantity, description, unit price, and total amount of the goods or services sold.

Purchase Order: A purchase order is a document prepared by a buyer to request goods or services from a supplier. It outlines the details of the purchase, including the items or services required, quantities, agreed-upon prices, delivery dates, and terms of payment.

1. Explain briefly various source documents.? updated 2023

Learning Goal: I’m working on a accounting writing question and need
the explanation and answer to help me learn.
The source documents are documents used to record the transactions in
the books of account. These documents provide evidence of a business
transaction.
These documents include cash memo, invoice, receipt voucher, debit
note, credit note, pay-in-slip, cheque etc.

1) CASH MEMO

When goods are sold or purchased for cash, the firm receives or gives
cash memos with details regarding cash transactions. These documents
become the basis for recording these transactions in the books of
accounts.

2) INVOICE

Invoice is prepared when goods are sold or purchased on credit. It
contains name of the party, quantity, price per unit and the total amount
payable. The original copy is sent to the buyer and the duplicate copy is
kept as evidence of sale and for future reference.


3) RECEIPT

When a firm receives Cash from a customer it issues a receipt as a proof
of receiving cash. It is prepared in duplicate. The original copy is handed
over to the Party making Payment and the duplicate is kept for future
reference. This document contains date, amount, name of the Party and
the nature of payment.
4) DEBIT AND CREDIT NOTE

2. These notes are prepared when goods are returned to supplier or when
an additional amount is recoverable from a customer .When goods are
returned by a customer, a proper credit note should be sent to him.

It is a written document in support of a transaction. It is a proof of a
particular transaction taking place for the value stated in the voucher.
Voucher is necessary to audit the account.


5) PAY -IN-SLIP

It is a form available in the bank for depositing cash or cheque in a bank
account. The counterfoil is returned to the depositor by the cashier with
his signature. Separate slips for depositing cash and cheques are used is
some banks.


6) CHEQUE

It is a document in writing drawn upon a specified banker and payable
on demand.
The name of the party, date, amount both in words and figures and
signature of the drawer must be filled in the cheque.


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