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Training Room 1: Source Documents

What I Need to Know

The first step in the accounting cycle is receiving the source document for a transaction. A source document is any piece of paper that provides details about a financial change in a business. This paper is proof that a transaction has occurred. For example, a sales receipt, an invoice, or a cheque issued by the business or received by the business is a source document. Take a moment to read about source documents in Step 1 of the Interactive Accounting Cycle.

Pictures of sales receipts and a paid invoice.

Left to right: © c/6769163/Fotolia, © Kenneth V. Pilon/shutterstock, © Jason Stitt/281515/Fotolia

Why Is This Important?

Running a business generates documents that support the transactions of the company. Keeping track of and maintaining these source documents are an important part of good business practice.

Gurpreet is having a conversation with his cousin, Ravinder, who is an accountant. You may remember Gurpreet from FIN1015, where he started his business called Gurpreet’s Snow Removal.

View the multimedia piece “Why Source Documents are Important” to see what Gurpreet and Ravinder are discussing.

Gurpreet did some research. Complete Time to Work to see what he discovered.