Why are source documents even needed?
- To provide evidence for a transaction that has taken place
- This is in line with the objectivity concept
A list of common Source Documents used in Principles of Accounts (POA):
1. Invoice: A document sent from seller to buyer that represents the amount owing by the buyer due to a credit sale (Of assets/income).
2. Debit Note: A document sent from seller to buyer that represents additional amount owing by the buyer due to an undercharge by seller (Of goods).
3. Credit Note: A document sent from seller to buyer that represents a reduction on amount owing by the buyer. (Due to overcharge or damaged goods; sales returns)
4. Receipt: Business Receives money
5. Payment Voucher: Business pays out money
6. Cheque Counterfoil: A document to counter check payments being made by the business
7. Memorandum: Document to represent drawings or capital input by owner
*notes are applicable to Principles of Accounts, based on Singapore O/N level syllabus