What is a source document?

What is a source document?

• A. The final financial statements
• B. A bank reconciliation report
• C. A list of accounts in the chart of accounts
• D. A business paper from which information is obtained for a journal entry

Answer: (D)

A source document is the business paper that provides the actual details needed to record a transaction in the accounting system. It includes date, amount, parties involved, and the accounts affected, and it serves as the evidence from which a journal entry is prepared. This makes it the basis for posting to the ledger, since the data on the document is what gets entered into the books. Examples include invoices, receipts, purchase orders, payroll records, and bank statements. Other outputs like final financial statements, reconciliation reports, or just a list of accounts do not serve as the original records used to create journal entries; they are produced from the entries and ledgers rather than used to initiate them.

A source document is the business paper that provides the actual details needed to record a transaction in the accounting system. It includes date, amount, parties involved, and the accounts affected, and it serves as the evidence from which a journal entry is prepared. This makes it the basis for posting to the ledger, since the data on the document is what gets entered into the books. Examples include invoices, receipts, purchase orders, payroll records, and bank statements. Other outputs like final financial statements, reconciliation reports, or just a list of accounts do not serve as the original records used to create journal entries; they are produced from the entries and ledgers rather than used to initiate them.