Which of the following is considered a source document in an accounting system?

Which of the following is considered a source document in an accounting system?

• A. Invoices
• B. Time cards
• C. Bank statements
• D. Budget reports

Answer: (B)

Source documents are the original records that capture a business event and feed data into the accounting system. A time card records hours worked by an employee and is used to compute wages, deductions, and labor costs, making it the primary evidence for payroll transactions. The accounting system relies on that time data to create the corresponding journal entries for wages payable, payroll expense, and tax withholdings. Bank statements are external documents used to reconcile the ledger rather than initiate payroll or revenue entries, and budget reports are management summaries rather than the original records of a transaction. While invoices are indeed a common source document for sales, the time card specifically starts payroll-related entries, so it is the correct example here.

Source documents are the original records that capture a business event and feed data into the accounting system. A time card records hours worked by an employee and is used to compute wages, deductions, and labor costs, making it the primary evidence for payroll transactions. The accounting system relies on that time data to create the corresponding journal entries for wages payable, payroll expense, and tax withholdings. Bank statements are external documents used to reconcile the ledger rather than initiate payroll or revenue entries, and budget reports are management summaries rather than the original records of a transaction. While invoices are indeed a common source document for sales, the time card specifically starts payroll-related entries, so it is the correct example here.