Source Documents

The General Journal is a systematic record of all transactions, however how do you know if you have copied down the wrong information? Where do you go in order to check to make sure that you have copied it down right?

Source Documents.... A source document must be prepared for every business transaction - it is any business form that serves as the original source of information for the business It is generally prepared with at least two copies - the two parties to a transaction, generally the seller and the buyer, each receive an exact copy

Examples of SD Cash Sales Slip - prepared for all cash sales - 3 copies are generally prepared - one is given to the customer - one is used by the accounting department - and one is kept in a file which serves as a record of all cash sales Sales Invoice - the bill completed by the seller and given to the buyer as a record of a credit sale - two copies are sent to the customer - one is used by the accounting department and one is kept in the sales department

Purchase Invoice - they are the sales invoices, but are used by the buyer to record the information - bill received by the purchaser of a purchase on account Cheque issued - used in order to make cash purchases and to pay bills - a copy is sent to the accounting department Cheques Received - received as payments for amounts owed or when customers buy something for cash - the business will put an endorsement on the back of the cheque

Bank credit memo - gives notice of an increase in a customer’s bank account Bank debit memo - gives notice of a decrease in a customer’s bank account Turn to page 136

Source documents are pre-numbered, every document must be accounted for Provides evidence that a transaction actually occurred - especially when writing cheques Also allows the company to check the accuracy of the records

GAAP Principle of Objectivity - accounting records must be based on objective evidence to support the value used to record the transactions Basically there has to be proof that a transaction occurred This stops companies from overstating assets or understating what they have paid off..etc...

WORK Page Q 19, 20 Page EX 10