2.3 Analyze Source Documents

2.3 Analyze Source Documents

Quick Answer: TESDA TR HCS412301 Element 2 — Analyze documents has two performance criteria: (2.1) gather, check, and verify documents using verification and validation processes; and (2.2) select account titles using standard selection processes. Typical documents include sales invoices, purchase invoices, official receipts, and vouchers.

Journal entries without documents are stories. On TESDA assessment and in real Philippine bookkeeping, source documents are the evidence trail. The Evidence Guide’s critical aspects include analyzed documents—assessors look for a visible path from paper (or validated digital copy) to account selection.

What “Documents” Include (Range of Variables)

The TR Range of Variables states documents may include but are not limited to:

Other workplace documents (delivery receipts, deposit slips, check stubs, debit/credit memos, payroll summaries) often accompany these four. Always reconcile them to the primary invoice/OR/voucher before journalizing.

PC 2.1 — Gather, Check, and Verify

Gather

Collect the complete set for the period or problem:

1. Sales invoices issued (numeric sequence).
2. Purchase invoices received from suppliers.
3. Official receipts issued for collections.
4. Payment vouchers (and supporting invoices) for disbursements.
5. Related receiving reports, contracts, or statements if provided in the case.

Missing document = pause. Do not invent amounts.

Check (clerical / completeness review)

For each document, confirm:

• Identity — correct business name / TIN context as given in the case.
• Date — falls in the accounting period you are journalizing.
• Sequence — invoice/OR numbers not duplicated or skipped without explanation.
• Arithmetic — quantity × unit price, discounts, VAT presentation if shown, and totals.
• Payee / customer — matches the narrative and chart counterparties.
• Authorization — vouchers signed/approved when the case requires approval marks.

Verify / validate (substance review)

Verification asks whether the document represents a real, allowable transaction for this entity:

• Does a “purchase invoice for raw lumber” belong to a pure service bookkeeping firm? Probably not—flag it.
• Does an OR for ₱50,000 match an open receivable of ₱50,000, a new sale, or a loan? Match to subsidiary evidence if provided.
• Are personal owner groceries sitting in a company voucher? Likely drawings, not office expense.

Validation processes in school/assessment settings often mean: compare document totals to problem exhibits, tick marks, and supervisor/assessor-provided answer keys for practice—not changing client facts arbitrarily.

Practical verification checklist

• Document type identified (SI / PI / OR / voucher)
• Date and reference number recorded
• Amount in figures = amount in words (if both present)
• Line items classified (asset vs expense vs inventory vs revenue)
• Cash vs on-account terms noted
• Chart of accounts titles shortlisted
• Anomalies escalated or annotated before entry

PC 2.2 — Select Account Titles (Standard Selection Processes)

After the document is clean, select titles from the chart of accounts (Element 1), not from memory slang.

Standard selection questions

1. What resource increased or decreased? → asset or expense candidate.
2. What obligation increased or decreased? → liability candidate.
3. Did owner’s equity change through investment, drawing, income, or expense?
4. Was income earned? → income title (Services, Sales, Interest Income, etc.).
5. Was this a balance sheet reclassification? (e.g., AR → Cash on collection)—no income again.

Mapping table — documents to likely titles

Manual policy decides borderline cases (supplies asset vs expense; perpetual vs periodic inventory). Follow the accounting manual you prepared in Element 1.

Worked Philippine Analyses

Case A — Sales invoice

Sales Invoice No. 1042 dated 12 April 2026: Cebu Dental Clinic billed ₱18,500 for bookkeeping retainer work, terms n/30.

• Gather/check: sequence OK, arithmetic OK, customer is a client.
• Verify: services rendered this period → accrue income.
• Titles selected: Debit Accounts Receivable ₱18,500; Credit Service Income ₱18,500.
• Do not debit Cash—no OR yet.

Case B — Official receipt on collection

OR No. 7781 dated 20 April 2026: received ₱18,500 from Cebu Dental Clinic referencing SI 1042.

• Verify: matches open AR.
• Titles: Debit Cash ₱18,500; Credit Accounts Receivable ₱18,500.
• Do not credit Service Income again.

Case C — Purchase invoice + voucher

Purchase Invoice from OfficeWorld ₱7,200 for printer ink on account (8 May). Voucher No. V-219 pays OfficeWorld ₱7,200 by check on 18 May.

May 8 titles: Debit Office Supplies (or Expense per manual) ₱7,200; Credit Accounts Payable ₱7,200.
May 18 titles: Debit Accounts Payable ₱7,200; Credit Cash in Bank ₱7,200.

Two documents → two events → two analyses.

Case D — Red flags

Voucher claims ₱25,000 “miscellaneous” with no invoice attached. Under PC 2.1 you do not select a final expense title until support arrives. On assessment, annotate incomplete documentation rather than guessing.

Common Element 2 Errors

1. Journalizing from the problem narrative while ignoring the attached invoice amounts.
2. Crediting Sales on every OR, including pure AR collections.
3. Expensing equipment purchases because the voucher says “paid today.”
4. Selecting titles not on the COA.
5. Mixing personal and business vouchers without using Drawings.

Bridge to Element 3

Analysis ends with selected titles and amounts. Element 3 formats them into journals with debit/credit placement, explanations, and 100% accuracy. If Element 2 is sloppy, Element 3 merely writes neat errors.