Which Of The Following Would Be Considered A Source Document In An Accounting System? (Check All That Apply.)
A. Checks
A check / cheque is issued as a proof of payment made to a payee (named on
it) by bank. There is a written order to the bank to pay the amount of check to
the person named on it or to the bearer of the check. A check is a legal document
and can be served as an evidence of business transaction.
B. Payroll Records
It shows the payroll records of employees and workers to whom the salaries and wages paid for the past periods. It shows compensation made to them by the company against the work performed or task completed.
C. Purchase Order (PO)
It is issued by the buyer to the seller that the purchase order is made. It
contains the details of goods or services ordered. This purchase order is used
as an evidence that the buyer accepts the offer of seller and he is ready to
pay for goods or services ordered. Purchase order shows that a transaction will
be made if the seller approved the order of the buyer. So, this can be served
as a document to support a business transaction.
D. Sales Receipt
A sales receipt is issued by the seller to the buyer showing that the
payment is received from the buyer against the goods sold or services
performed. It is issued in case of cash sales.
The option E is incorrect choice here as a budget is the future planning of income and expenditures for a specific period, e.g., for 5 years, but not a documentation to support business transactions, which are occurred throughout the accounting period, in an accounting system.
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