Source Documents And The Ledger Of An Entity Are Linked Together Through Preparation Of Subsidiary Journals. Select One: True. False
Are Source Documents Directly Connected to the Ledger? (Answer: False) Many accounting students and beginners assume that source documents are directly linked to the ledger. However, the correct answer is False . Understanding why this is false becomes much easier once you understand the Accounting Cycle . How Source Documents Flow Through the Accounting Cycle Every business transaction begins with a source document . These documents provide evidence that a Transaction has occurred and serve as the foundation for accurate financial records. Common examples of source documents include: Invoices Sales receipts Purchase receipts Debit and credit notes Memos Bank deposit slips These documents are not posted directly to the ledger . Instead, they follow a structured accounting process: Business transactions occur. Source documents are collected as evidence. Transactions are recorded in the appropriate subsidiary journal (such as the Sales Journal or Purchases Journal). Information f...