Key Terms: Chapter 2 Flashcards
Purchase Order?
A document issued by the buyer of goods & services.
Sent to the seller
Indicating the goods / services required.
Delivery note?
A Doc. sent by seller to buyer with the goods, detailling what has been sent.
Invoice?
A doc. issued by the seller of goods / services
Indicating the amount owing
And the required payment date.
Credit note?
A doc. issued by the seller of the goods / services
Reducing the amount owed by the buyer.
Statement?
A doc. issued by the seller to the buyer summarising
Invoices
Credit notes
Payments rec’d
The amount owed.
Trade discount?
a % reduction in the selling price
(Buyer -> seller)
Because of the trading relationship.
Bulk discount?
a Discount given by seller to buyer for bulk purchases
ie. Purchases over certain quantities or over certain money amounts.
Settlement Cash discounts?
a % reduction in selling price given to the buyer.
If payment is made within a specified short period of time.
VAT?
A government tax on sales, normally calculated on invoices & credit notes.
Credit limit?
The max amount the seller will allow the customer to owe at any one time.
Coding?
Document references using numeric, alphabetic or alpha-numeric identification systems.
Document Retention Policy?
The requirement for an organisation to keep documents for a specified minimum period of time.
Usually 6 years plus the current year.
