Source Documents and Vouchers A source document is a document containing information that creates, authorizes, or supports a financial statement entry. I...
A source document is a document containing information that creates, authorizes, or supports a financial statement entry. It serves as a first-hand source of information, meaning the entity or individual preparing the financial statement directly recorded the events or transactions that occurred. These documents are usually written by the entity itself or by an external auditor.
Examples of source documents include:
Invoices: A purchase invoice from a supplier, showing the date, amount, and terms of payment.
Wages paid to employees: A payroll form showing the employee's name, address, and wages paid.
Receipt: A document showing the purchase of a good or service, along with the supplier's name and invoice number.
Loan agreements: A contract between a lender and a borrower outlining the terms of the loan, including interest payments and repayment schedule.
Insurance policies: A document issued by an insurance company outlining coverage amounts and premiums paid.
A voucher is a document issued by a company or organization in a specific accounting period for the purpose of establishing, applying, or supporting a specific accounting entry. It is a second-hand source of information, meaning the entity or individual preparing the financial statements relies on the information contained in the voucher to create the entry.
Examples of vouchers include:
Debit memo: A document issued by a supplier or vendor, showing the goods or services purchased and the invoice amount.
Credit memo: A document issued by a buyer, showing the payment made and the amount credited to the seller's account.
Internal voucher: A document issued by an entity to itself, such as a transfer of funds within the company.
By carefully analyzing source documents and vouchers, accountants can gain a deeper understanding of the financial information presented in the financial statements. This knowledge helps them identify, analyze, and interpret the relevant transactions and events that occurred during the reporting period