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

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Answer in Brief

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

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Solution

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.

Concept: Recording of Transactions 1
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APPEARS IN

NCERT Accountancy Financial Accounting 1 Class 11
Chapter 3 Recording of Transactions - I
Questions for practice | Q 2 | Page 87
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