Business documents Flashcards
What is the purpose of an order form?
This is used by the customer to place an order with the supplier when wishing to buy goods.
Name the details included in an order form.
The customer’s and supplier’s name and address
The date the order is placed
An order form
Catalogue number and description of goods
Quantity required
Unit price and total price of each item
The total cost of the order
What is the purpose of an invoice
Sent by the supplier to the buyer when goods are purchased on credit to charge the buyer for the goods. The buyer uses the invoice to record the purchase of the goods in the ledgers.
Name the details included in an invoice.
The supplier and the customer’s name and address
The date
An invoice number
Catalogue number and description of goods
Quantity
Unit price and total price of each item
Total cost of the goods
Total VAT charged on the goods
The invoice total ( Net Goods Value + VAT )
Payment terms and any discount available
What is the purpose of a credit note?
This is sent by the seller to the buyer when the buyer returns goods which they originally purchased on credit. The buyer uses this document to record the purchase return.
Name the details included in a credit note.
The supplier’s and the customer’s name and address
The date
A credit note number
Catalogue number and description of goods
Quantity and reason for the goods being returned
Unit price and total price for each item
Total cost of the goods
Total VAT on the returned goods
The total value of the credit note
What is the purpose of a copy credit note?
This is an exact copy of the credit note. It is kept by the original seller of the goods in order to record the return of the goods back to them. This is shown as a sales return in ledger paper.
What are the details included in a copy credit note?
Exactly the same as the credit note.
What is the purpose of a statement?
This is sent by the supplier to the customer at the end of each month. It shows all the transactions which have taken place between the supplier and the customer during that month. The final balance shown in the statement represents the amount due by the customer to the supplier at the end of each month. The customer is a debtor to the supplier.
What is an opening balance?
The amount that was owed by the customer to the supplier from the previous month.
What does the closing balance represent?
The closing balance represents the amount owed by the customer to the supplier at the end of the month.
What are the details included in a statement?
An opening balance
Invoice numbers sent during that month and the total value of each invoice-shown as DR entries and added to the opening balance/running balance.
Credit note numbers sent during the month and the total for each credit note-shown as CR entries on the statement and deducted from the balance.
Payments made to the business by the debtor. These are shown as DR entries and deducted from the total amount owed.
The closing balance
What is the purpose of a receipt?
Given to the customer by the supplier when payment has been made. This is used by the customer to record the details of payment in the ledger-bank/cash CR and purchases DR. This acts as proof of payment.
What are the details included in a receipt?
Name and address of the seller
Date
Description of goods
Total amount paid for the goods
What is the purpose of a copy receipt?
This is an exact copy of the receipt and is used to record the details of the sale and payment received in the supplier’s ledger-sales CR and bank/cash DR.
