Source Documents Essay - 275 Words

Source Documents (Essay Sample) Content: Source documentInsert nameInsert institutionIntroductionThe source document is a basis upon which business transactions are recorded upon the basis. They are always retained to be used as an as evidence when the company's financial statement is being reviewed by auditors, and they need adequate verification that transaction did occur. Source documents contain information like the following: A description of a business transaction, the date of the sale as well as a specific amount of money and an authorizing signature. All this is for the purpose of records and ensuring that there are transparency and accountability in any operation conducted by an organization.The article the Book of accounting and source document, there are various merits of source documents that are discussed. About this, the article explains that missing a source document in any transaction can lead to frauds and corruption that cannot be traced. However, the article elaborates on the merits of ke eping the source document ('Editionen / Source Document', 2000). For instance, the article states that source documents serve as evidence in case any auditing exercise is to be carried out by the external or internal auditor.The article also relates to proper documentation in that; it elaborates the merits that one will attain in keeping proper books of accounts. For instance, ledger account is will help an organization to summarize and put together different transactions that are related to the same item that is helpful in preparing financial statements. That is, while preparing a financial statement, one will require the total decrease or increase in an item account during a particular accounting period.Source documents, therefore, are tangible documents that an organization needs to put into consideration for it will help save time and cost (Warner, 2004). Moreover, source documents will enable an organization to keep records and gauge whether one is making profits or losses in a given transaction. Therefore, source documents will help a firm in ensuring that there are effectiveness and efficiency in all of its financial transactions.