Source Documents

Source Documents Documents that show PROOF of a transaction Companies use a variety of source documents to record business transactions Source documents are referenced in the General Journal as part of the explanation For example, Cash Accounts Receivable Received payment on account, cheque 147.

Principle of Objectivity Source documents assist accountants in satisfying the Principle of Objectivity, another one of the IFRS Principle of Objectivity requires that there should be objective evidence to back up all recorded business transactions Source documents provide objective, verifiable evidence to support the value placed on transactions

When a business makes a sale: Cash Sales Slip Copy of sales receipt from a cash sale DR Cash, CR Sales Revenue Sales Invoice An invoice given to a customer for a sale on account DR Accounts Receivable, CR Sales Revenue Cash Receipt List A list of all the cash sales and payments on account for a day DR Cash, CR Sales Revenue or Accounts Receivable

When a business makes a purchase: Purchase Invoice A receipt from a supplier to show a purchase made by the business on account DR Asset or Expense, CR Accounts Payable Cheque Copy Proof that a business wrote a cheque to pay a bill or to make a purchase DR Accounts Payable or Asset or Expense, CR Cash Business can also receive a cheque for a cash sale or as payment on account DR Cash, CR Accounts Receivable or Sales Revenue

Bank source documents: Bank Debit Memo Expense to a business (business OWES bank money) DR Bank Expense, CR Cash Bank Credit Memo Revenue for a business (bank OWES business money) DR Cash, CR Interest Earned (a revenue account)