Business Documents Flashcards
What is record keeping?
This is the process of creating, collecting and maintaining records of documents which act as evidence of business transactions.
State 5 reasons why it is important for a firm to have proper documentation in all of its business transactions.
1) To safeguard and retrieve information about sales, customers, and suppliers.
2) To monitor business performance.
3) To make informed business decisions.
4) To meet legal requirements and to reduce risks of theft and fraud.
5) In case of dispute, we’ll documented transactions serve as evidence to resolve conflict efficiently and fairly.
Name 4 types of business documents and define and state their purpose.
Purchase Requisition- Internal documents used to request the purchase of goods or services, detailing specifications, quantities and reason for purchase.
Purpose- To get approval from the relevant persons in the business to purchase items. These relevant people have the purchasing authority and management of how money is used or allocated so their approval is necessary before a purchase is made.
Pro forma Invoice- this is an estimate or quotation also known as a preliminary bill of sale. These are documents usually provided to customers before a sale, outlining the terms of a potential transaction including prices, quantities and payment terms.
Purpose- To request information from a potential supplier about the products, quantities and prices.
- The pro forma invoice will also have information on the shipping process such as the weight, packaging and delivery cost.
Statement of accounts- this is a document sent by the seller to the buyer to show details of transactions that occurred over a specified period, detailing amounts owed or due.
Purpose-
Stock Cards-
