What type of document serves as proof of a business transaction?

A source document serves as proof of a business transaction because it is the original record that provides evidence of the transaction's occurrence. This can include invoices, receipts, bank statements, and contracts, among other types of documents. Source documents contain specific details such as the date of the transaction, the parties involved, the amounts, and the nature of the transaction, making them crucial for accurate record-keeping and verification.

In the context of funeral service education, utilizing source documents is essential for maintaining clear financial records and complying with legal and regulatory requirements. They ensure that every transaction can be traced back to its origin, thus supporting the integrity of the financial statements and reports produced by the business.

While a ledger entry is important for tracking transactions after they have occurred, it does not provide the initial proof; it summarizes the information from source documents. A summary report compiles data but lacks the evidence of individual transactions, and an income statement provides a broader view of financial performance over a period rather than specific transaction proof. Therefore, the role of source documents as foundational evidence is critical in any business context, including funeral service operations.