Source Documents

What are Source Documents?

Source documents are documents generated or produced each time a transaction takes place. It is the proof that a transaction has occurred. They provide information for farm records.

They can also be defined as documents of initial transactions from which bookkeeping records are made or kept.

Source documents include the following:

The documents are as follows:

(i) Invoice
(ii) Credit note
(iii) Debit note
(iv) Return Inwards
(v) Return Outwards
(vi) Receipt
(vii) Bank Statement
(viii) Purchase Order
(ix) Sales Order
(x) Cheque
(xi) Airway Bill
(xii) Deposit Slips / RemittanceA remittance is a sum of money sent to another party, usually in another country. More Slips / Tellers
(xiii) Negotiable Instruments
(xiv) Delivery Notes

Lets’s briefly discuss these source documents:

i. Invoice:

The invoice is the complete summary of all transactions. It shows the quantity of goods, price discounts, and terms of payment. It is issued by the seller to the buyer.

Invoices include:

a. Sales Invoice: This is a commercial document issued giving the details of the exchange of goods and services, and contains the basic facts about sales transactions. It records the details of the amount owed by a customer and an original copy is sent to the customer.

b. Purchase Invoice: These are incoming invoices issued by the creditors or suppliers. A purchase invoice shows the amount owed by a business to suppliers.

c. Supplier Invoice: Supplier invoices are the sales invoices and bills issued by the supplying vendor and received by the buying customer.

ii. Credit Note:

This is a document issued by the seller to the buyer to correct an overcharge. It is done when some goods already been charged, are returned as damaged or not ordered.