Key terms: Chapter 7

Question 1

Statement of account?

Answer 1

Document issued by a supplier listing all the payments, invoices & credit notes on the account.

Providing a total of the amount due.

Question 2

Purchases Ledger Account?

Answer 2

The account of the supplier in the accounting records of the buyer;

Also listing the transactions on the account.

Question 3

Reconcilliation?

Answer 3

A comparison and tying up of transactions in 2 documents

(Statement of Account, & Purchase Ledger)

In order to check for any discrepancies.

Question 4

Discrepancy

Answer 4

A difference between the transactions recorded in 2 seperate documents

(eg. a wrong figure highlighting an error)
(eg. a wrong document such as a disputed invoice.)

Question 5

Remittance Advice

Answer 5

An advice sent to a supplier advising the sending of an amount of money

Either by cheque or direct to the supplier’s account

Through the banking system.