Financial documents- pages 14-18

Question 1

What are financial documents used for?

Answer 1

Enterprises use a range of financial documents throughout the buying and selling process to record the sale and purchase of goods and services.

Question 2

What is the order of the financial documents?

Answer 2

1. Purchase order
2. Delivery note
3. Invoice
4. Receipt
5. Credit note
6. Statement of account

Question 3

What is a purchase order?

Answer 3

A legal offer to buy goods from supplier and lists item required, including price agreed and quantity. This is sent to supplier requesting products

Question 4

What is a delivery note?

Answer 4

Sent when goods are delivered, listing details about the order, including content of delivery. It also lists any goods that are not supplied and can be used by customer to check that goods delivered match good requested on purchase order.

Question 5

What is a invoice?

Answer 5

A request for payment. It lists price of goods delivered, delivery charges and amount owed to supplier. Also states date by which the money should be paid

Question 6

What is a receipt?

Answer 6

A record of payment made by a customer

Question 7

What is a credit note?

Answer 7

Lists any goods that may have been returned by the customer and confirms money refunded to customer

Question 8

What is a statement of account?

Answer 8

A financial summary of goods ordered, purchased or returned by the customer over a period of time, usually a month

Question 9

What are financial documents?

Answer 9

Financial documents provide a record of the trading and financial transactions taking place between the enterprise and its customers.

Question 10

What is the main purpose of financial documents?

Answer 10

They enable enterprises to run smoothly

Question 11

Purposes of financial documents

Answer 11

• To calculate costs, revenues, profit or loss
• To track whether goods have been delivered
• To provide information for financial statements
• To aid management decisions

Question 12

Importance of accuracy of financial documents

Answer 12

• Ensure correct goods are delivered
• Check customer is being charged correctly
• To allow businesses to check it has not over paid

Question 13

Problems with inaccurate financial records

Answer 13

• Profits calculated wrong
• Reputation of business damaged
• Cash flow problems
• Suppliers not paid on time
• Incorrect payments

Question 14

What is a goods received note?

Answer 14

It thanks the business for sending products and contains queries