Financial records Flashcards
What is the purpose of financial records?
To show transactions that take place on a day to day basis.
What do profit and loss accounts show?
The revenue and costs of a business for a given amount of time, usually a year.
What do balance sheets show?
A business’ financial position.
What does liquidity measure?
How much cash a business has available to pay what it owes.
What does profitability measure?
How much profit a business makes over a given amount of time.
What are ratios?
Calculations used to work out measurements of liquidity or profitability.
Which document would be used when placing an order?
Purchase order.
What details does a purchase order include?
What the customer wants to order.
When it was ordered.
Who ordered it.
Quantities ordered.
Which document provides information when a product(s) is delivered to a customer?
Delivery note.
What are the benefits of using delivery notes?
Provide proof that goods have been delivered.
Give a record of what has been delivered for customer and business.
Useful for auditors for checking movement of goods.
Used for checking what has been delivered against invoice to be sent.
Confirm that goods have been received in good condition or record any problems found.
Can be used to track where goods have gone. Avoids them being stolen or used by someone else.
If the customer does not have time to check the delivery note immediately, what document would they use to check/record what has been delivered?
Goods received note.
Which document is used to request payment for goods/services?
Invoice.
What information does an invoice include?
Date.
Who the customer is.
Details of goods/services.
Other reference information eg invoice number, order number, amount owed, length of time to pay, how to pay.
Which document might be issued instead of giving money back to the customer for damaged goods etc?
Credit note.
What are the benefits of issuing credit notes?
Helps to retain the customer rather than losing them to a rival business.
They are a good way of judging if there are problems in certain areas of the business or products.
