A Little Ketchup on Source Documents

My first Tutor2u blog will, like most of the others (sadly there will be more!), focus on certain parts of Accounting. There will be regular mention of ‘easy marks’. These are the ones which turn a C grade to a B grade and so on. It’s a theme I use to make sure my students maximise their marks. This blog is on arguably one of the easiest part of the AS Accounting syllabus. Yet it’s one which students get wrong continually. Source documents are a continual source of frustration to me that students don’t pick up these relatively easy marks.

When a transaction takes place between two businesses there is one document that starts the process and allows us to then put something into the books of original entry (or day books). The piece of paper representing this is known as the source document. The examiner will usually tell you what the transaction was and you then work backwards to identify the source document. The clue is always in the wording of the question! Read the full question – very carefully!

Most students get confused when we talk about credit sales or credit purchases. Instead you should focus on each transaction being treated separately. The first transaction is the purchase/sale of the goods and only later does the actual payment occur.

If you revise this carefully it should help with one of the more simple topics in the syllabus. Some of the key transactions are put together in a simple table here for you: -

@nialsatis