Chapter 4

Question 1

Copy of an invoice retained by a seller when a credit sale is made

Answer 1

Sales invoice

Question 2

Invoice received by a customer for a credit purchase made

Answer 2

Purchases invoice

Question 3

Given to customers for paying their debts promptly

Answer 3

Cash discount

Question 4

Given to customers who buy in bulk. A deduction on the list price

Answer 4

Trade discount

Question 5

Price at which the trade usually sells the product

Answer 5

List price

Question 6

Enables a business to order its bank to pay a certain set amount of money regularly at a stated date to an individual or an organisation

Answer 6

Standing order

Question 7

Small document that a person depositing money fills in with the date and amount of money being paid by them into their bank account

Answer 7

Paying-in slip

Question 8

Takes place when funds are transferred from one bank account to another by electronic means

Answer 8

Bank transfer

Question 9

Sales invoice

Answer 9

Copy of an invoice retained by a seller when a credit sale is made

Question 10

Purchases invoice

Answer 10

Invoice received by a customer for a credit purchase made

Question 11

Cash discount

Answer 11

Given to customers for paying their debts promptly

Question 12

Trade discount

Answer 12

Given to customers who buy in bulk. A deduction on the list price

Question 13

List price

Answer 13

Price at which the trade usually sells the product

Question 14

Standing order

Answer 14

Enables a business to order its bank to pay a certain set amount of money regularly at a stated date to an individual or an organisation

Question 15

Paying-in slip

Answer 15

Small document that a person depositing money fills in with the date and amount of money being paid by them into their bank account

Question 16

Bank transfer

Answer 16

Takes place when funds are transferred from one bank account to another by electronic means

Question 17

Credit note

Answer 17

Document issued by a seller of goods on credit to request a reduction in the invoice received

Question 18

Debit note

Answer 18

A document issued by a purchaser of goods on credit to request a reduction in the invoice received

Question 19

Where are debit notes recorded?

Answer 19

Nowhere (not the accounting records of the customer and not the accounting records of the supplier)

Question 20

Are trade discounts recorded in the accounting records?

Answer 20

No

Question 21

Are cash discounts recorded in the accounting records?

Answer 21

Yes, recorded as discount received or discount allowed

Question 22

Where does a customer record a credit note?

Answer 22

Purchases returns

Question 23

Where does a supplier record a credit note?

Answer 23

Sales returns

Question 24

What is a cheque counterfoil?

Answer 24

The bit left behind in the cheque book