SOURCE DOCUMENTS
- Is any form of paper or electronic record which gives evidence that a transaction has
taken place.
Importance of Source documents
a. Provides a record of transactions
b. Required for verification/ proof of transactions
c. Needed by auditors for auditing purposes
d. Required by tax authorities e.g. ZIMRA
Features common on Source documents
a. Printed on special paper
b. Date of transaction
c. Amount of transaction
d. Name of both parties, that is, buyer and seller
e. Name of source document
f. Reference number
g. Description of transaction
Features common on Source documents
1. Cash receipt- shows cash received or payment made by cash e.g. paid for
insurance by cash
2. Sales invooce- is a record of credit sales and a claim for payment for goods. It is
issued when goods are sold on credit. **Cash sales will have a cash receipt not a
sales invoice
3. Purchases invoice- shows goods bought on credit. It is issued when goods are
bought on credit.
4.Cheque butt/ sub - is a piece of the cheque margin which remains when the
cheque is torn-off from the cheque book. It shows payment made by cheque.
5. Bank deposit- show cash payment directly into a bank account.
6.Bank statement - is a copy of the business’ bank account as it appears in the
books of the bank. It shows
a.payments made directly through the bank e.g. Standing Order, RTGS
b. money received directly into the bank account e.g. bank transfers, bank interest
7.statement of account - is a summary of transactions between a customer
(buyer) and a supplier (seller) in a given period and showing the outstanding
balance.
8. Pay roll- shows wages and salaries paid to employees
9. Remittance slip- shows the invoice being paid for especially where there are
other invoices not yet paid up.
10. Debit note- is sent to a supplier to notify of a return of goods and request a
credit note. Also used to correct an undercharge. It is usually printed in green
11. Credit note- shows goods returned from a customer (sales returns). It is a
response to a debit note and shows that returned goods have been received. Also
used to correct an overcharge. It is usually printed in red.
Buys goods sells goods
Purchases invoice sales invoice.
Returns goods returns goods
Debit note debit note.
Supplier acknowledges receipt of Business acknowledges receipt of the returned goods by sending a
credit note the returned goods by sending a credit note issuer of document receiver
it is important to note that the credit note is the source document for both sales returns and
purchases returns. The debit note is only send to request a credit note.
13. Petty cash voucher- is used to record small cash payments and receipts e.g.
purchase of ball points for $3, purchase of fuel for $40, sale of used tyres for $50.
Note that a Letter of Inquiry, Quotation, Price List, Catalogue and Order are
business documents as well but not source documents for accounting purposes.
supplier
Business
customer
