Why is the evidence provided by source documents important to accounting? - Bzziii

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Why is the evidence provided by source documents important to accounting?









Evidence provided by source documents is important to accounting because for recording transactions, it is necessary that these transactions are evidenced by an appropriate document such as cash memo, purchase invoice, sales invoice, pay-in-slip, cheque book, pass book etc. Such a document is called the Source Document.

The evidence provided by the source document is important in the following manners:

1. It provides evidence that a transaction has actually occurred.

2. It provides important and relevant information about date, amount, parties involved and other details of a particular transaction.

3. It acts as a proof in the court of law.

4. It helps in verifying transactions during the auditing process.

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