Accounting chapter 6 (Business Documents) Flashcards
List the main business documents used
.Invoice
.Debit not
.Credit note
.Statement of account
.Cheque
.Receipt
Define Debit note
A document issued by a purchaser of goods on credit to request a reduction in the invoice recieved.
Define Invoice
A document issued by the supplier of goods on credit, showing details , quantities, and prices of goods supplied`
When is an invoice issued
When the supplier sells good on credit
What information will an invoice contain
.Name and address of supplier
.Name and address of customer
.The date
.Full details, quantities, and price of goods supplied
Define Trade discount
It is a reduction is price of goods and the rate often increases according to quantity purchased
Advantage of Trade discount
It encourages the costumer to buy in bulk
What will the consumer do if there are any shortages or overcharges
The costumer will send a debit note
What information will debit note have
.Name and address of supplier
.Name and address of costumer
.The date
.Full details, quantities, and price of goods supplied
Define credit note
A document issued by the supplier to notify the costumer of a reduction in the invoice previously issued
When will the supplier issue a credit note
When goods are returned, reported faulty or when the costumer has been overcharged in an invoice
Define statement of account
At the end of each month, the supplier will issue a statement of account which is a record of all the transactions of the month
What information will statement of account have
.Name and address of the supplier
.Name and address of customer
.The date
.The balance owing at the start of the period
.Invoices and credit notes issued
.Payments recieved
.Any cash discounts allowed
.The balance owing at the end of the period
Define cheque
A written order to a bank to pay a stated sum of money to the person or business names on the order
Define receipt
A receipt is a written acknowledgement of money recieved and acts as proof of payment
