SOURCE DOCUMENTS

Table of Content

• What is Source Document?
• Receipt
• Invoice
• Debit Note
• Credit Note
• Bank Statement

What is Source Document?

This is the original document in which accounting records are kept. These documents form the basis of accounting information because all entries in the financial statement are derived from them. The most common source documents include receipt, invoice, debit note, credit note, bank statement, among others.

Examples of Source Documents

The following are the most commonly used source documents in a business organisation:

1. Receipt
2. Invoice
3. Debit Note
4. Credit Note
5. Bank Statement

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1. Receipt: This is the document that serves as the proof of ownership of an item. It is issued on a cash transaction. The information contains in a receipt include the name, address, contact details of the seller and the rows to enter the name, address, amount paid, date and the signature of the customer.
2. Invoice: This is a document issue by the seller to credit customers in most cases to provide the details of the goods being bought or supplied. The information contain in this document include the invoice number, business name and address, issued date, customer name and address, price of the goods, quantity supplied, terms of trade, and the space for the signature of both the seller and customer or receiver of the goods.
3. Debit Note: this document is issued when a customer is mistakenly undercharged or the business returns goods to suppliers. It is used to inform the customers stated amount has been debited to his account or to notify the supplier that is account has been debited with the amount of goods return as stated in the document. Debit note is normally prepared with blue ink.
   For example: Items worth N58,000 sold to Mr Abiodun was mistakenly calculated as N54,000 before later discovered by the bookkeeper. In this situation, a debit note of N4,000 will be prepared and forwarded to Mr Abiodun to inform him about the real amount of the goods bought and that a sum of N4,000 has been debited to his account.
4. Credit Note: This is the opposite of a debit note. It is issued when a customer is mistakenly overcharged or a customer return goods back to the business. It is used to inform the customer that the over stated amount has been credited to his account, thereby reducing his debt to the business. Unlike the debit note, credit note is normally prepared with red ink.
   For Example: Mr Ade who bought items worth N4,600 but was mistakenly calculated as N5,200 before later being discovered by the bookkeeper. In this situation, the business will prepare a credit note of N600 and forward it to Mr Ade to inform him that he was mistakenly overcharged and that the excess of N600 has been credited to his account.
5. Bank Statement: This is a statement issued by bank at a regular intervals, i.e. monthly, quarterly or yearly, stating the details of deposits and withdrawals from the account.