Chapter 2 Flashcards
What is the main doc flow for a credit trans?
Quote, PO, sales order, delivery note, sales invoice, credit note, payment
Why is the price quotation importation?
Because this is the price at which your business is now contracted to sell goods
What re the different types of discount
Trade discount, bulk discount, prompt payment discount
What is a trade discount
Is a definite amount that is deducted from the list price of goods for the supplies to some customers, with intent of customer loyalty
What should be checked on a trade discount invoice?
That the calculation of the trade discount has been agreed and the correct percent has been deducted
When is the VAT calculated on a trade discount invoice
The vat is calculated after the discount has been deducted
What is bulk discount similar to?
Is similar to trade discount
Is bulk discount disclosed on the invoice?
Bulk discount is deducted from the price list and disclosed on invoice
When is bulk discount given?
By a supplier for sales orders above a certain quantity.
Why are prompt payment discounts offered?
To customers in order to encourage early payment of invoices
Where are the details of prompt payment normally shown?
Bottom of invoice
How is prompt payment different to trade and bulk discount?
A prompt payment discount is only a reduction in price if the organisation decides to take advantage of it by making payment early, whereas trade discount is a definite reduction in price
What is a PO?
A buyer generated document that authorises a purchase trans
What details do you need to check when an order is made?
Price agree?
Delivery acceptable?
Discount acceptable?
What is a sales order?
A seller generated doc that authorises a sale to a customer
When does a sales order get purchased?
After receipt of a purchase order
How does a supplier confirm a customers order?
With a sales order, to avoid misunderstanding
What does a sales order confirm?
The terms on which goods will be sold including: quantity/type of goods or service
Date of supply and delivery address
Price and payment terms including discounts
When do goods get delivered?
When the price and terms have been completed
What is a delivery note?
A document accompanying goods despatched to a customer explaining what the delivery contains
How many parts to a delivery note are there?
Three parts
What are the three parts to a delivery note?
One to be kept by cust in order to compare the PO and SO
One to be signed by cust and returned to supplier as evidence the goods have been received
One signed by the customer and kept by the delivery organisation, such as courier as evidence they have delivered the goods
What is goods received note?
An internal doc completed by the purchaser that records the details of goods received and contains similar info to a delivery note.
What do the goods received note often get compared to?
The PO as part of payment authorisation process.
What info does a goods received note contain?
Supplier name
Quantity/type of goods or service
The associated purchase order reference and delivery note number
The name and reference of the carrier for delivery
What does the goods received note often get compared to?
The purchase order as part of a payment authorisation process
What info does a goods received note contain?
Supplier name
Quantity/type of goods or service
The associated purchase order reference and delivery number
The name and reference of the carrier for delivery
