What is a source document?

A source document is the original record containing the details to substantiate a transaction entered in an accounting system.

For example, a company’s source document for the recording of merchandise purchased is the supplier’s invoice supported by the company’s purchase order and receiving ticket.

A company’s source documents for its weekly payroll are the employees’ time cards. A manufacturer’s production records will also include source documents such as materials requisition forms.

In the past, source documents were printed on paper. Today many of the paper documents are being converted to an electronic format.

Source documents should be retained for future reference. For instance, auditors will review a portion of a company’s transactions and will need to examine the pertinent source documents.

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