Source document

A source document is evidence used to understand and support an economic event. Common examples include invoices, receipts, purchase orders, contracts, time records, bank statements, shipping records, and electronic payment data. Each document can establish some facts, but it rarely establishes the complete accounting answer.

An invoice may name a seller and customer, describe goods or services, state an amount, and show a billing date. It does not necessarily prove when control transferred, when work was completed, whether the customer accepted the work, or whether the amount belongs in the records of the entity you are analyzing.

The document is not the event

The economic event is what occurred. The document is a representation or trace of that occurrence. A repair can be completed before the invoice is prepared. A loan agreement can be signed before the bank transfers cash. A bank statement can report a transfer after the parties have already recorded it.

Keep the event date, document date, recording date, and cash date separate. They may be the same, but their agreement is a fact to verify rather than an assumption to make.

The document is not the accounting decision

A receipt proves more than “cash moved,” but cash movement does not identify the accounting treatment. Cash received from a customer may be revenue, a collection of an existing receivable, a refundable deposit, or an advance for work still owed. The applicable facts and requirements decide which account is appropriate.

The document also does not set the entity boundary. If an owner uses a personal card to buy tools that the business receives and uses, the card statement shows who paid. Other evidence is needed to explain why the business obtained the tools and what the owner provided to the business. Both the owner and the business may need records from their own perspectives.

Build an evidence chain

For a basic transaction, connect the conclusion to the evidence in a short chain:

1. Identify the entity whose records are being prepared.
2. Describe the event without account names.
3. List the source documents and the facts each one supports.
4. Note missing, conflicting, or uncertain facts.
5. Apply the recognition and measurement requirements.
6. Link the approved accounting record back to its support.

This chain lets another person inspect how the entry was prepared. It also helps a reviewer distinguish a missing document from a wrong accounting conclusion. A complete file can support the wrong treatment, and a correct conclusion can still lack adequate support.

Evidence quality depends on the question

No document is always sufficient or always weak. A bank record may be strong evidence that cash moved on a stated date but weak evidence about why it moved. An internal time record may support hours worked but not the terms of a customer contract. A contract may support rights and duties but not prove that later performance occurred.

Ask whether the available documents support the particular fact needed for the accounting conclusion. Then retain the link between evidence, review, approval, and the resulting record.