Chapter 2

Question 1

What is the main doc flow for a credit trans?

Answer 1

Quote, PO, sales order, delivery note, sales invoice, credit note, payment

Question 2

Why is the price quotation importation?

Answer 2

Because this is the price at which your business is now contracted to sell goods

Question 3

What re the different types of discount

Answer 3

Trade discount, bulk discount, prompt payment discount

Question 4

What is a trade discount

Answer 4

Is a definite amount that is deducted from the list price of goods for the supplies to some customers, with intent of customer loyalty

Question 5

What should be checked on a trade discount invoice?

Answer 5

That the calculation of the trade discount has been agreed and the correct percent has been deducted

Question 6

When is the VAT calculated on a trade discount invoice

Answer 6

The vat is calculated after the discount has been deducted

Question 7

What is bulk discount similar to?

Answer 7

Is similar to trade discount

Question 8

Is bulk discount disclosed on the invoice?

Answer 8

Bulk discount is deducted from the price list and disclosed on invoice

Question 9

When is bulk discount given?

Answer 9

By a supplier for sales orders above a certain quantity.

Question 10

Why are prompt payment discounts offered?

Answer 10

To customers in order to encourage early payment of invoices

Question 11

Where are the details of prompt payment normally shown?

Answer 11

Bottom of invoice

Question 12

How is prompt payment different to trade and bulk discount?

Answer 12

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

Question 13

What is a PO?

Answer 13

A buyer generated document that authorises a purchase trans

Question 14

What details do you need to check when an order is made?

Answer 14

Price agree?
Delivery acceptable?
Discount acceptable?

Question 15

What is a sales order?

Answer 15

A seller generated doc that authorises a sale to a customer

Question 16

When does a sales order get purchased?

Answer 16

After receipt of a purchase order

Question 17

How does a supplier confirm a customers order?

Answer 17

With a sales order, to avoid misunderstanding

Question 18

What does a sales order confirm?

Answer 18

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

Question 19

When do goods get delivered?

Answer 19

When the price and terms have been completed

Question 20

What is a delivery note?

Answer 20

A document accompanying goods despatched to a customer explaining what the delivery contains

Question 21

How many parts to a delivery note are there?

Answer 21

Three parts

Question 22

What are the three parts to a delivery note?

Answer 22

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

Question 23

What is goods received note?

Answer 23

An internal doc completed by the purchaser that records the details of goods received and contains similar info to a delivery note.

Question 24

What do the goods received note often get compared to?

Answer 24

The PO as part of payment authorisation process.

Question 25

What info does a goods received note contain?

Answer 25

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

Question 26

What does the goods received note often get compared to?

Answer 26

The purchase order as part of a payment authorisation process

Question 27

What info does a goods received note contain?

Answer 27

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