Login
Copyright

Source Documents in Accounting: Definition and Purpose

An error occurred trying to load this video.

Try refreshing the page, or contact customer support.

Coming up next: Using the Accounting Equation: Adding Revenues, Expenses & Dividends

You're on a roll. Keep up the good work!

Take Quiz Watch Next Lesson
 Replay
Your next lesson will play in 10 seconds
  • 0:05 What Are Source Documents?
  • 0:33 Examples of Source Documents
  • 1:45 Why Source Documents…
  • 2:55 Lesson Summary
Add to Add to Add to

Want to watch this again later?

Log in or sign up to add this lesson to a Custom Course.

Login or Sign up

Timeline
Autoplay
Autoplay
Create an account to start this course today
Try it free for 5 days!
Create An Account

Recommended Lessons and Courses for You

Lesson Transcript
Instructor: Rebekiah Hill

Rebekiah has taught college accounting and has a master's in both management and business.

Do you know what role source documents play in accounting? If not, don't worry; by the end of this lesson, you will. You will also learn the definition of source documents and see some common examples of source documents.

What Are Source Documents?

Kate owns an antique shop. This morning she got a phone call from her accountant asking her to bring her the source documents she has for the month. 'Well, Mrs. Brown, I would be glad to, but I have no idea what source documents are,' Kate says.

'Oh, Kate,' Mrs. Brown says, 'I am so sorry I didn't explain. Source documents are pieces of paper that prove that a transaction occurred.'

Examples of Source Documents

'Pieces of paper?' Kate asks. 'What kind of paper?'

'Well, Kate,' Mrs. Brown says, 'Source documents are anything that you get during the course of a transaction. It can be receipts from purchases and invoices from sales you made, whether they be sales on account or cash sales; invoices that show you made purchases on an account are also source documents; checks you wrote to pay bills; deposit slips that prove you put a certain amount of money in the bank; or copies of paid bills - they're all source documents.'

Kate looks down at the scattered papers that are all over the counter. She gathers them up and begins to flip through them, pulling a few sheets out. 'Okay,' she says, 'So I have receipts where I paid cash for merchandise that I bought last week. These are source documents, right?'

'Yes, they are,' Mrs. Brown says.

Kate pulls another few pieces of paper out of the stack. 'And, I have copies of the bills that I paid this month. Will these work as source documents?'

'As long as it shows proof of a financial transaction, then yes, it is a source document,' Mrs. Brown says.

'Well, now that I know what I am looking for, I can get you what you need!' Kate says.

Why Source Documents Are Important

'Okay,' Kate says to herself, 'I think that I have it all together. I want to hand-deliver these and find out why they are so important!'

Kate drives herself to Mrs. Brown's office armed with all the source documents she can find. She walks in and hands the items to Mrs. Brown.

'Thank you, Kate. That was pretty quick. I'm glad you brought these. I really need to get your books done.'

'I was wondering, Mrs. Brown, can you explain to me why these are so important?' Kate asks.

To unlock this lesson you must be a Study.com Member.
Create your account

Register for a free trial

Are you a student or a teacher?
I am a teacher
What is your educational goal?
 Back

Unlock Your Education

See for yourself why 10 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back

Earning College Credit

Did you know… We have over 95 college courses that prepare you to earn credit by exam that is accepted by over 2,000 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it free for 5 days!
Create An Account
Support