 Transactions are first recorded by accounting personnel as journal entries  Information comes from source documents  Business transactions are initiated by the owner, sales-people, department supervisors, managers, and other authorized people  Accounting is informed of transactions by means of business papers (source documents)

 Source documents are kept on file for reference purposes, for locating errors, etc  Auditors use them to verify accounting records

 Is a business form showing the details of a transaction in which goods or services are sold to a customer for cash. Usually, there is an original and at least one copy.

 Used for sales on account (non-cash sales). Shows the details of a transaction in which goods or services are sold on account.

 Businesses will buy a variety of goods and services from numerous suppliers (typically).  No single journal entry will do for all of the different items purchased.  The account debited will depend on what particular goods or services are purchased.  The account credited will always be the same – accounts payable.

 Most business payments are still made by cheque  A cheque copy is a document supporting the accounting entry for a payment cheque (see page 189)  Most cheques are issued to pay for things previously bought on account and supported by purchase invoices on file  Purchase invoices are summarized on the tear off portion of the cheque (fig. 6.9)  A bill or receipt is needed to support the accounting entry for a cash purchase

 Each day in business, some cheques are usually received from customers  The cash receipts daily summary is a business paper that lists the money coming in for cash receipts  It shows the names of the customers, the $ amount, and what the amounts are paying for in each case  Remittances advices are used to complete this (p. 190 – fig. 6.10)

 The bank may inform a business of transactions that either increase or decrease a business’s bank account.  These come in two forms;  1. bank credit advice (increase in bank acct)  2. bank debit advice (decrease in bank acct)

 Receipts for donations or postage  Bills, such as hydro or telephone  invoices  Online banking transactions  Insurance  Written memos from the owner  Bank statements  Cash register tapes