5.4: Transfers, Deposits and Withdrawals

Source Documents

The source document is the original record of a transaction. During an audit, source documents are used as evidence that a particular business transaction occurred. Examples of source documents include:

• Cash receipts.
• Credit card receipts.
• Cash register tapes.
• Cancelled cheques.
• Customer invoices.
• Supplier invoices.
• Purchase orders.
• Time cards.
• Deposit slips.
• Notes for loans.
• Payment stubs for interest.

At a minimum, each source document should include the date, the amount, and a description of the transaction. When practical source documents should contain the name and address of the other party of the transaction. When a source document does not exist, for example when a cash receipt is not provided by a vendor or is misplaced, a document should be compiled as soon as possible after the transaction, using other documents such as bank statements to support the information on the generated source document.

Once a transaction has been journalised, the source document should be filed and made retrievable so that transaction can be verified should the need arise at a later date.

General Funds flow into a business in a variety of ways and for a variety of purposes. The source and purpose of all funds received (cash, cheques, bank transfers, credit/debit cards) must be documented and recorded. Proper accounting procedure dictates that receipts should be issued for all sales and that there should be division of duties in receiving, depositing and verifying receipts.