Critical Thinking Assignment - Accounting Principles and Practices

This homework assignment focuses on critical thinking in the context of accounting, specifically concerning the role of source documents in recording financial transactions. The assignment addresses the importance of source documents, such as sales orders, cash register receipts, and purchase invoices, in maintaining accurate records for sales to customers and receipts of cash. The solution provided highlights the significance of these documents in manual accounting systems, emphasizing their role in providing a paper trail for all financial activities. The assignment further discusses the different source documents, including cancelled checks, credit memos, and expense reports, used in various business contexts. The solution underscores the need for proper archiving and record-keeping practices to ensure the integrity of accounting processes. This assignment provides a comprehensive overview of source documents and their functions within accounting frameworks.

Running head: CRITICAL THINKING
Critical Thinking
Name of the Student:
Name of the University:
Author Note

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Table of Contents
Answer to Question A.....................................................................................................................2
References........................................................................................................................................4

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Answer to Question A
The issue that has been presented in the question is that the requirement of the selected
source documents that would be needed in manual accounting in order to record the sales to
customers and receipt of cash has been asked has been asked to explain.
In order to execute the identification of the potential source documents, the term source
document must be at understood. The term source document refers to the paper trail that has
been essentially created for the purpose of recording the financial transactions. For instance, in a
small business the checks that are written for office supplies are regarded as the source
documents. Source documents are essential for bookkeeping and accounting processes as it
forms the sole record of the occurrence of a financial transaction (Hess, 2017).
It should be noted here that once the information has been recorded in the form of a
source document, it should be indexed for the purpose of easy access of that particular document.
Proper archiving techniques for preserving the source documents should also be developed by
the accountant or the management of the company. Some important examples of the source
documents that are used by organization using manual accounting, can be listed down as:
 Cancelled check
 Credit memo
 Expense Report
 Invoice
 Sales receipt
 Time card
 Invoice
In the regular course of business, a source document is created every time when a
particular transaction occurs. The invoice or receipts usually feature the sales and purchases that
take place in business. Deposit slips are generated at the point when deposits are made to the
banks.
The source documents that are used by different companies vary greatly. The type of
source document used generally depends on the nature of business held. A particular company

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might need an unnecessary amount of paper work for the purpose of documenting a simple
purchase order. While other companies might be too much lenient allowing the managers to
order, make payments or sell the products without any adjustment done to the inventory.
Therefore, maintaining an optimum level of record keeping especially in the form of source
documents while dealing in manual accounting, is very important (Lamb, 2014).
The particular source document that would be required to record the sales to the
customers is the sales order. This document along with a bill of lading can be utilized for
invoicing a particular customer (Patton & Potok, 2016).
The source document required to record receipt of cash might be the cash register tape or
cash register receipt that would record the cash receipts from customers. The statement of
account is another source document that is sent by business at the end of the month to every
customer who have purchased goods on credit (Patton & Potok, 2016).
Lastly, the source document needed for ensuring the correct payment of the money to the
suppliers is the purchases invoice. The purchases invoice specifies the particulars that a business
has incurred from its supplier (Wright, 2017).

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References
Hess, C. T. (2017). Merit-Based Incentive Payment System: Referencing Source Documents.
Advances in skin & wound care, 30(11), 528.
Lamb, A. (2014). Primary source digital documents: CCSS & complexity of text.
Patton, R. M., & Potok, T. E. (2016). U.S. Patent No. 9,256,649. Washington, DC: U.S. Patent
and Trademark Office.
Wright, B. (2017). Protocol, Informed Consent Documents, and Investigator Brochure. In A
Comprehensive and Practical Guide to Clinical Trials (pp. 49-58).