Source Documents – are the forms, evidences or legal/official papers that serve as supports to the

underlying economic transactions. These evidential matters support the objectivity of accounting
records. One basic accounting principle is the verifiability of accounting records. The truthfulness and
the accuracy of the source documents will assure the user of financial information that it is free from
bias and error and faithfully represents what it purports to represent.

The ff. common business forms and documents:

1. Official Receipt – is a written acknowledgement of something received as money or goods.

2. Check Voucher – is a document that serves to recognize a liability and authorize the
disbursement of cash through the use of check.
3. Petty Cash Voucher – is a document that serves to recognize a liability and authorize the
disbursement of cash through the use of petty cash fund.
4. Check – is a draft upon a bank and payable on demand, signed by the maker or drawer,
containing an unconditional promise to pay a certain sum of money to the order of the payee.
5. Promisory note – is a promise or engagement in writing to pay a specified sum at a time therein
limited or on demand or at sight, to a person, therein named or to his order or bearer.
6. Commercial Invoice – is a written itemized statement of merchandises sold to the buyer,
together with the prices and charges of merchandise sent or to be sent to him.
7. Debit memorandum – is a written notice which informs client of reduction in his account. A
credit memorandum informs tha client of an increase in his account. (Note that the
memorandum in this case is issued by a bank. If the issuing company is not a bank, there would
be a reverse application.)
8. Bank Deposit Slip –is a document which serves as an evidence of an act of placing money in the
custody of a bank of banker, to be withdrawn at the will of the depositor or under rules or
regulations agreed upon.
9. Payroll Sheet – is a written list of salaries to be paid, with the amounts due. The aggregate of
these amounts is the money to be disbursed.
10. Billing or statement of account – is a report issued periodically by a bank or creditor to a
customer setting forth the amounts billed, credits given and balance due.

FLOWS OF ACCOUNTING ACTIVITIES

IDENTIFYING → MEASURING → COMMUNICATING

ADD: Documents

1. Sales invoice – is prepared by the seller of goods and sent to the buyer. The document contains
the name and address of the buyer, the date of sale and information – quantity, description and
price – about the goods sold. It also specifies the amount of sales and the transportation and
payment terms. Vendors provide sales invoices to customers after the consumer pays for a good
 or service received. It is a written or electronic documentation of the transaction from the
merchant to the consumer. It is important for companies to have evidence of all sales, to protect
themselves as well as for record keeping purposes.
2. The bill of lading – is a document issued by the carrier – a trucking, shipping or airline – that
specifies contractual conditions and terms of delivery such as freight terms, time, place and the
person named to receive the goods.
3. Statement of Account – is a formal notice to the debtor detailing the accounts already due.
4. Official Receipt – evidences the receipt of cash by the seller or the authorized representative. It
notes the invoices paid and other details of payment.
5. Deposit Slips – are printed forms with depositor’s name, account number and space for details
of the deposit. A validated deposit slip indicates that cash and checks with the supplied details
were actually deposited or credited to the account holder.
6. Check – is a written order to a bank by a depositor to pay the amount specified in the check
from his checking account to the person named in the check. The entity issuing the check is the
payor while the receiver is the payee. Payment by Cheque is safest way to conduct
business transactions as it helps to maintain record in account statement to whom
the payment is made by whom payment is received. So it becomes easier to track
the transactions through bank account statement.
7. Purchase Requisition – is a written request to the purchaser of an entity from and employee or
user department of the same entity that goods be purchased.
8. Purchase Order – is an authorization made by the buyer to the seller to deliver the merchandise
as detailed in the form.
9. Receiving report – is a document containing information about goods received from a vendor. It
formally records the quantities and description of the goods delivered.
10. Credit memorandum – is a form used by the seller to notify the buyer that his account is being
decreased due to errors or other factors requiring adjustments.

General Ledger – is a grouping of all accounts used in preparing the financial statements. It is generally
called a controlling account because it reports in summarized form the activities that have taken place
as recorded in its subsidiary ledger.

Subsidiary Ledger –is a group of like accounts that contains the independent data of a specific general
ledger. Whenever individualized data must be maintained for a specific general ledger account, a
subsidiary ledger is created. A subsidiary ledger contains the details to support a general ledger
control account. For instance, the subsidiary ledger for accounts receivable contains all of the
information on each of the credit sales to customers, each customer's remittance, return of
merchandise, discounts, and so on. With these details in the subsidiary ledger, the Accounts
Receivable account in the general ledger can be a control account. As a control account, it will
simply report the aggregate amounts of the accounts receivable activity.
Source Documents – are the forms, evidences or legal/official papers that serve as supports to the
underlying economic transactions. These evidential matters support the objectivity of accounting
records. One basic accounting principle is the verifiability of accounting records. The truthfulness and
the accuracy of the source documents will assure the user of financial information that it is free from
bias and error and faithfully represents what it purports to represent.

1. Check – is a written order to a bank by a depositor to pay the amount specified in the check
from his checking account to the person named in the check. The entity issuing the check is the
payor while the receiver is the payee.
Purpose: it helps to maintain record in account statement to whom the payment is made by
whom payment is received. So it becomes easier to track the transactions through bank account
statement.
2. Check Voucher – is a document that serves to recognize a liability and authorize the
disbursement of cash through the use of check.
Purpose: are used as basis for preparing a check, and should contain details that will show
information about the party who will receive the check, the person who approved the check, the
person who prepared the check, the nature of the payment, relevant dates, the amount of the
check and other accounting information.
3. General Ledger – is a grouping of all accounts used in preparing the financial statements. It is
generally called a controlling account because it reports in summarized form the activities that
have taken place as recorded in its subsidiary ledger.
Purpose: holds all the financial information used to create the income statement and balance
sheet reports, and serves several main purposes in the financial operation of the business.
4. Subsidiary Ledger –is a group of like accounts that contains the independent data of a specific
general ledger. Whenever individualized data must be maintained for a specific general ledger
account, a subsidiary ledger is created.
 Purpose: subsidiary ledger is maintained to keep a track of individual accounts. Subsidiary
ledger provides details of individual balances which are not available in general ledger. It is the
expansion of General ledger. 
5. General journal is part of the accounting record keeping system. When an event occurs that
must be recorded, it is called a transaction and may be recorded in a specialty journal or in the
general journal.
Purpose:  it can tell you how much your total sales were.
6. Trial balance is a device used to periodically test the equality of debits and credits as recorded in
the ledger accounts.
Purpose: of a trial balance is to ensure that all entries made into an organization's general
ledger are properly balanced.
7. Sales invoice – is prepared by the seller of goods and sent to the buyer. The document contains
the name and address of the buyer, the date of sale and information – quantity, description and
price – about the goods sold.
Purpose: It specifies the amount of sales and the transportation and payment terms. Vendors
provide sales invoices to customers after the consumer pays for a good or service received. It is
 a written or electronic documentation of the transaction from the merchant to the consumer. It
is important for companies to have evidence of all sales, to protect themselves as well as for
record keeping purposes.
8. Official Receipt – is a written acknowledgement of something received as money or goods.
Purpose: is to ensure all buyers are aware of their right to ask for receipt or invoice. And that
the tax on the said sale is properly declaredand remitted to the BIR.
9. Credit memorandum – is a form used by the seller to notify the buyer that his account is being
decreased due to errors or other factors requiring adjustments.
Purpose: is to correct any sales situation that demands a reduction in the amount of goods or
services sold previously.
10. Deposit Slips – are printed forms with depositor’s name, account number and space for details
of the deposit. A validated deposit slip indicates that cash and checks with the supplied details
were actually deposited or credited to the account holder.
Purpose: are used by the bank to verify your deposits. The bank checks to make sure the
amounts on the checks match the deposit slip and the total is added correctly to make sure that
the correct amount is added to your account.
11. Petty Cash Voucher – is a document that serves to recognize a liability and authorize the
disbursement of cash through the use of petty cash fund.
Purpose:  is an important form of evidence for reconciling the remaining cash in the petty cash
box. At the beginning of an accounting period, there should be a certain amount of cash in the
box and no vouchers (which should have been removed as part of the month-end entry for the
preceding month). Then, as cash is disbursed from the petty cash box, the vouchers are
essentially swapped for cash. 
12. Statement of Account is a report issued periodically by a bank or creditor to a customer setting
forth the amounts billed, credits given and balance due.
Purpose: Companies use account statements to balance their A/P schedules and ensure that all
invoices are paid correctly to each vendor. Companies may not pay individual invoices without a
statement of account.