Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

FA1 > Business Transactions and Documentation > Flashcards

Business Transactions and Documentation Flashcards

1
Q

what are the two main types of Business Transactions?

A

Sales and Transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is the term for every time property changes hands?

A

Business Transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what are the two ways that business transactions occur by

A

Cash and Credit transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

explain what a cash transaction is

A

when a buyer pays cash to the seller at the same time as goods or services are transferred

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

explain what a credit transaction is

A

a credit transaction is a sale of purchase which occurs some time earlier than cash is received or paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

what are the other types of business transactions which need to be recorded

A
  • payment of wages
  • borrowing money
  • Offering a discount
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

what is the simplest form of business transaction

A

a cash transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

what defines a business

A

a business is any organisation existing to trade and make a profit, including a sole trader

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

will a business ever be treated as together as the owner(s)

A

the business will always be separate from the owner(s). this includes sole traders, companies, or partnerships

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what is the rule of dual effect of financial transactions

A

double entry bookkeeping is based on the premise that every financial transaction has a dual effect, one account is debited, and another account will be credited

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

what is external documentation

A

External documentation is used to record a business transaction on a document

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

what are examples of external documentation

A

purchase invoice
delivery notes
cheque counterfoil
bank statement
quotation
order form/ purchase order

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is a purchase invoice

A

a purchase invoice is aa document that is received from suppliers for goods or services bought on credit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the purpose of a business

A

The purpose of a business is to make a profit for its owner(s)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the difference between a cash and credit transaction

A

The difference between a cash and credit transaction is the timing. During a cash transaction, the customer pays at the same time as when goods or services are transferred, however for credit transactions,there is a gap in between the sale or purchase and the eventual cash settlement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what is profit

A

profit is the excess of income over expenditure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

how is a business transaction evidenced

A

by internal and external documentation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what is a sales invoice

A

a sales invoice is a document issued to a buyer, detailing goods or services sold, prices, and payment terms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what is the purpose of a sales invoice

A

to act as proof of a sale made by the business and is used for recording revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what is a credit note

A

a credit note is a document issued by a business when it refunds a customer due to returned goods or overcharges

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what is the purpose of a credit note

A

it acts as proof of a sale made by the business and is used for recording revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

what is a debit note

A

a document sent to a customer informing them of additional charges, often due to pricing errors or undercharges

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

what is the purpose of a debit note

A

to increase the amount owed by the customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

what is a payment voucher

A

an internal document use to approve and record payments before issuing checks or transfers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
what is the purpose of a payment voucher
to ensure proper authorization of payments
25
what is a goods received note
a document confirming that the ordered goods have been received in the correct quantity and condition
26
what is the purpose of a goods received note
to ensure inventory records are updated accurately
27
what is a stock requisition form
a request document for obtaining stock from the inventory
28
what is the purpose of a stock requisition form
it helps control inventory usage within the business
29
what is a material requisition form
it is a document that requests raw materials for production
30
what is the purpose of a material requisition form
to ensure materials are properly allocated and used
31
what is a purchase invoice
a document received from a supplier showing details of goods or services bought
32
what is the purpose of a purchase invoice
it serves as evidence of purchases and accounts payable
33
what is a receipt
a receipt is a document given by a seller to acknowledge payment received from a buyer
34
what is the purpose of a receipt
it is proof of payment for purchases
35
what is a cheque
a written order instructing a bank to pay a specific amount to a payee
36
what is the purpose of a cheque
it is used for making payments without cash
37
what is a bank statement
a document from the bank showing all transactions in a business's account over a period
38
what is the purpose of a bank statement
a bank statement helps reconcile business records with bank transactions
39
what is a credit note [ from a supplier]
a document issued by a supplier to correct overcharges or returned goods
40
what is the purpose of a credit note [ from a supplier]
it reduces the amount the business owes to suppliers
41
what is a debit note [ from a supplier]
a document from a supplier requesting additional payment due to undercharges
42
what is the purpose of a debit note [ from a supplier]
it increases the amount payable to suppliers
43
what is a delivery note
a document that accompanies goods being delivered, listing the items included in the shipment
44
what is the purpose of a delivery note
it confirms that goods were delivered and received
45
what is a purchase order
a document sent to a supplier to request goods or services
46
what is the purpose of a purchase order
to formalize purchase agreements
47
what is a quotation
a price estimate given by a supplier before a purchase is made
48
what is the purpose of a quotation
it helps businesses compare costs before ordering
49
what is a tax invoice
it is a document showing tax details, such as VAT or GST, on a transaction
50
what is the purpose of a tax invoice
to help businesses comply with tax regulations
51
what is the purpose of the accounting system
- record - summarise - present
52
what is a sales order
a customer writes out an order or signs an order for goods or services they wish to buy
53
what is a invoice
- invoices are created when there is a sale or purchase - a invoice is a demand for payment
54
what is the source document for when a transaction is settled immediately with cash
receipt
55
what is the source document when an invoice is sent from a seller to buyer, and is paid on receipt of the goods using cheque or cash
cash on delivery [ COD] invoice
56
what is the source document when an invoice is sent after goods have been delivered, with request to pay within a certain time
credit invoice
57
what does FOB stand for
Free on Board
58
where do the 4 copies of invoices go to
- purchaser - kept as a file copy - delivery note sent to customer for signature and retained by seller - advice note signed and kept by purchaser
59
what is the purpose of the invoice sent to the purchaser
request to pay for goods
60
what is the purpose of the invoice kept as a file copy
partly to keep records straight, and partly so that the business can prove it made the invoice in the first place
61
what is the purpose of the invoice that is a kept as a delivery note
the deliverer has to ask the purchaser to sign the note as proof that the goods have been delivered, the note is then brought back to the supplier's business and matched with the file copy as proof of the validity of the sale
62
what is the purpose of the invoice that is kept as a advice note
this goes with the goods, but it is left with the purchaser [the purchaser will use it as a checklist to make sure that the goods being delivered are the same as the invoice]
63
where are the 7 locations that sales order sets go
- sent to customer - sent to warehouse - kept in sales department - passed to accounts department - sent with goods [ delivery note] - sent with goods [ advice note] - kept in warehouse
64
what are the three locations where multi-play purchase order sets go
- sent to supplier - kept in purchasing department or warehouse - kept in accounts department
65
what is the purpose of the purchase order sent to the supplier
to place, confirm an earlier order
66
what is the purpose of the file copy that is kept in the purchase department or warehouse
it is for reference, and to compare with supplier's advice and delivery notes
67
what is the purpose of the file copy kept in the accounts department
it is to match against the invoice and the GRN when delivered
68
what is a credit note
a credit note is used by a seller to cancel part or all of previously issued invoice(s)
69
what are some reasons that a customer might want to cancel their order
- goods supplied were of inferior quality - might have an error in invoice - price being incorrect
70

FA1 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions