Learn It
A source document is the original evidence of a business transaction. It is created at the time the event happens — not later, and not by the bookkeeper. Think of it as the receipt of truth: if there is no source document, there is no proof the transaction occurred.
The bookkeeper's job is to read the source document and record what it shows. The document tells you who was involved, how much money moved, when it happened, and what it was for.
Source documents matter because they protect the business. They prove income and expenses are real, which matters for taxes, loans, and audits. They also let the bookkeeper — or anyone else — check the books against the original facts.
Common Types of Source Documents
Sales receipts
Proof you received payment from a customer at the time of sale.
Customer invoices
Bills you send to customers for work done or products sold.
Vendor bills
Bills you receive from suppliers for goods or services you'll pay later.
Credit card statements
Monthly statements listing every charge and payment on a card.
Bank statements
Monthly records of deposits, withdrawals, and fees from the bank.
Purchase receipts
Proof of small cash purchases, like supplies from a store.
See It
Let's look at two transactions and identify the source document and what the bookkeeper takes from each one.
Transaction 1 — Customer pays $400 for lawn service
Source document: A payment receipt or confirmation (could be a printed receipt, an emailed invoice marked paid, or a bank deposit record).
Bookkeeper records: Customer name, date, amount ($400), that cash went up, and that service revenue was earned.
Transaction 2 — Receive a $642 bill from a supplier
Source document: The vendor bill (vendor invoice) itself — showing the supplier, the date, the invoice number, and the amount due.
Bookkeeper records: Supplier name, bill date, invoice number, amount ($642), due date, and that the business now owes $642. No cash moved yet.
Do It
Here is a vendor bill. Read it carefully and enter the key details a bookkeeper would need to record this transaction.
Do It — Extract the Details
Below is a vendor bill. Read it like a bookkeeper would, then enter the key details a bookkeeper needs to record this transaction. Use the exact values shown on the document.
Invoice
Greenline Supplies
128 Industrial Way · Portland, OR
Invoice #
INV-4471
Bill to:
Riverside Landscaping LLC
Bill date
March 14, 2025
Due date
April 13, 2025
| Item | Amount |
|---|---|
| Mulch bulk order (4 pallets) | $580.00 |
| Delivery | $62.00 |
| Total Due | $642.00 |
Prove It
Answer each question, then read the explanation. There's no score — this is just to help the ideas stick.
Question 1
Why does a bookkeeper need a source document before recording a transaction?
Question 2
A business receives a $1,200 bill from a supplier, due in 30 days. What is the source document, and what should the bookkeeper record from it?
Question 3
Which of these is NOT a source document?
Key Takeaways
- A source document is the original proof that a transaction happened.
- Common types include receipts, invoices, vendor bills, bank statements, and credit card statements.
- The bookkeeper extracts who, what, when, and how much from the document.
- Source documents protect the business for taxes, loans, and audits.
- Recording without a source document is risky — there is no proof to back up the entry.