4.2 Source Documents

Question 1

The cost principle GAAP

Answer 1

The cost principle states that the accounting for purchases must be at the cost price (what it was purchased for).

Question 2

Source documents

Answer 2

is a business paper that shows the nature of a transaction and provides all of the information needed to account for it.

Question 3

Source document proofs

Answer 3

• Cash sales slip
• Sales invoice
• Bank advice
• Cheque copy
• Purchase invoice

Question 4

The Cash Sales Slip

Answer 4

A cash sales slip shows the details of a transaction that was sold to a customer with cash

Question 5

Sales Invoice

Answer 5

A sales invoice shows the details of an item or service that you sold on account.

Question 6

Point of Sale Summaries (POS)

Answer 6

A point of sale (POS) terminal is a computerized cash register that allows the business to exchange funds electronically (debit cards, credit cards, etc.)

Question 7

Purchase Invoice

Answer 7

The purchase invoice is a business document showing the details when you purchased on account.

Question 8

Cheque Copies

Answer 8

A cheque copy supports the accounting entry for any payment made by cheque

Question 9

Bank Advices

Answer 9

A bank debit advice is notification of a DECREASE in the business’ bank account (i.e. bank fees paid)
A bank credit advice is notification of an INCREASE in the business’ bank account (i.e. interest earned)