What Are Source Documents And Why Are They Important In Accounting

Source Documents are those evidence documents which are used to record a business transaction. Examples of source documents are Invoices, Purchase Order, Sales Order, Memos, Cash Receipts, etc.

Source Documents usually contain Date, Particulars, Names and addresses of the parties between them a business transaction takes place, column of Amount, signature of the parties, etc.

Source Documents are necessary as these are the basic parts of records of any business transaction and if there is any error or mistake in the fact and figures of the business transaction, then this error or mistake will continue to the whole process unless it is identified early by the accounts department.