4.3 Source Documents and Books of Original Entry

• The meaning and importance of source documents
• Types of source document
• The meaning and importance of books of original entry
• Types of books of original entry
• Recording transactions in books of original entry

• explain the importance of source documents and books of original entry in book-keeping
• analyse the source documents used for recording business transactions
• examine the books of original entry used in book-keeping
• record transactions in the relevant books of original entry
• appreciate the books of original entry for recording business transactions

“What are the source documents used in book-keeping?”

“Why are the books of original entry important in book-keeping?”

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1. Source documents
   40 min · 1 practice tasks · quiz
   The written evidence behind every business transaction: what source documents are, why they matter, and the main types and their uses.
2. Why records are kept: the audit trail
   40 min · 1 practice tasks · quiz
   The five-stage chain from a transaction to the final accounts, and why every entry needs a document behind it.
3. The invoice
   40 min · 1 practice tasks · quiz
   What an invoice must show, how trade discount appears on it, and why it is the document behind every credit sale.
4. Credit notes and debit notes
   40 min · 1 practice tasks · quiz
   The two documents that correct an invoice already issued, when each is used, and which book each feeds.
5. Receipts and cash sale slips
   40 min · 1 practice tasks · quiz
   The documents for money received and for goods sold for cash, and why the two are not the same thing.
6. Cheques, counterfoils and paying-in slips
   40 min · 1 practice tasks · quiz
   The parts of a cheque, why the counterfoil rather than the cheque is the source document, and how money is paid into a bank.
7. The petty cash voucher
   40 min · 1 practice tasks · quiz
   The document for small payments that have no invoice, and why the approval signature is the whole control.
8. The order cycle and its documents
   40 min · 1 practice tasks · quiz
   Enquiry, quotation, order, delivery note, invoice and statement - and which of the six actually enters the books.
9. Books of original entry
   40 min · 1 practice tasks · quiz
   The first books in which transactions are recorded from their source documents: what they are, why they matter, the main types, and how to record in them.
10. Which document feeds which book
    40 min · 1 practice tasks · quiz
    The seven books of original entry, the document that feeds each, and how to decide where a transaction belongs.
11. The sales journal
    40 min · 1 practice tasks · quiz
    How credit sales are listed, totalled and posted, and why the journal is a list rather than an account.
12. The purchases journal
    40 min · 1 practice tasks · quiz
    Recording credit purchases of goods for resale, and the distinction that decides what belongs here.
13. The two returns journals
    40 min · 1 practice tasks · quiz
    Returns inwards and returns outwards - which is which, how to remember, and how returns affect the sales and purchases figures.
14. The two-column cash book
    40 min · 1 practice tasks · quiz
    The book that is also an account: receipts and payments, cash and bank columns, balancing and contra entries.
15. The three-column cash book and discounts
    40 min · 1 practice tasks · quiz
    Adding discount columns, why they are memorandum only, and the difference between discount allowed and discount received.
16. The petty cash book and the imprest system
    40 min · 1 practice tasks · quiz
    Analysis columns, the imprest float, and why a separate book for small payments saves the main cash book.
17. The general journal
    40 min · 1 practice tasks · quiz
    The book for everything the others do not cover, the format of an entry, and why the narration is not optional.
18. Trade discount, cash discount, and checking your work
    40 min · 1 practice tasks · quiz
    The two discounts compared, one sale followed through both, and the checks that catch most book-keeping errors.