FINANCIAL DOCUMENTS

Question 1

What is a cash transaction?

Answer 1

Goods and services are sold and paid for immediately using any method of payment (not just cash!)

Question 2

What is a credit transaction?

Answer 2

Goods and services are sold on credit and paid for at a later date

Question 3

Give 3 examples of documents used in the selling process

Answer 3

Price quotation
Purchase order
Delivery note
Invoice
Returns note
Credit note
Statement of account

Question 4

What is a statement of account?

Answer 4

This is sent by the seller to the buyer to remind what is owed

Question 5

How are customers usually identified on financial documents?

Answer 5

Customer codes - typically organised alphanumeric codes created by a certain procedure

Question 6

What are primary documents (and which documents are primary)?

Answer 6

The first documents that are recorded in the bookkeeping system, they affect accounting values

Invoices and credits

Question 7

What are source documents?

Answer 7

Before processing invoices and credits we match the details of primary documents to source documents to check they agree