5.2- The Balance Sheet

Question 1

When an asset, liability, or equity item is recorded for accounting purposes, a
business paper or document is required to verify the dollar amount. This business
paper holds the name of

Answer 1

“source document”. (This paper is the original record
of the transaction).

Question 2

Examples of source documents:

Answer 2

Hydro bills
- Telephone bills
- Cheque copies
- Store receipts
- Cash register summaries
- Credit card slips

Question 3

From a source document comes another GAAP. The objectivity principle states
that accounting will be recorded on the basis of

Answer 3

objective evidence. In other words,
the transactions will be recorded by fact, not by personal opinion or feelings.
Not all transactions affect the assets, liabilities, and equity accounts from the balance
sheet. Some transactions might only affect assets, while others may affect a combination of assets, liabilities, and owner’s equity accounts.