Question

In: Accounting

Which of the following is true of source documents in an accounting information​ system? A. A...

Which of the following is true of source documents in an accounting information​ system? A. A manual document cannot be considered as a source document in an accounting information system. B. All journal entries can be considered as source documents in an accounting information system. C. Source documents provide control and reliability in an accounting information system. D. In a manual accounting information​ system, source documents refer to financial statements.

Solutions

Expert Solution

Option (C) is correct.

Source documents provide control and reliability in an accounting information system.

Explanation : Before recording journal entries accounting vouchers are properly supported by source documents, for any further references and judging the authenticity of the transaction. So, source documents provide reliability of accounting information system and also with the availability of source documents , controlling over transactions can be properly activated.

Why the rest of the options are not correct ?

A) Where soft copy of source documents are not available , then manual source documents can be used for further references related to transactions .

B) Journal entries are just the recorded facts of the transaction or events in the books of account , these are only recorded when vouchers are prepared along with supported source documents. Without proper source documents journal entries can't be made.

D) Source documents are the basis of recording of transactions in the books of account, and financial statements are the final outcomes of the accounting process .


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