Key Words for Chapter 1

Question 1

Key word: Capital

Answer 1

The amount of money invested by the owner in the business

Question 2

Sales that are made for immediate payment by cash, cheque, credit or debit card

Answer 2

Cash Sales

Question 3

Used to ensure accuracy of filing and recording

Answer 3

Coding systems

Question 4

A document issued to a customer who returns goods, showing the details of the goods returned and their value

Answer 4

Credit Note

Question 5

Credit Sales

Answer 5

Sales that are made now but payment is not required for a specific period of time

Question 6

Delivery Note

Answer 6

Document sent to the customer with the items being despatched, which must be signed by the customer confirming receipt of the items

Question 7

Invoice

Answer 7

A document issued by the seller to the purchase of goods on credit showing the details of the goods sold, the amount due and the due date of payment.

Question 8

Limited liability company

Answer 8

A business that is owned by shareholders and managed by directors, who are not necessarily the same people. The debts of the business and the personal debts of the owners (shareholders) are legally separate.

Question 9

Owned

Answer 9

The person who has invested money in a business

Question 10

Partnership

Answer 10

A business that is jointly owned and managed by two or more individuals

Question 11

Petty Cash

Answer 11

Small amounts of cash held physically within the business and used to make small payments

Question 12

Petty Cash Voucher

Answer 12

A document that records payments out of petty cash

Question 13

Price List

Answer 13

Written confirmation from a supplier as to the price of goods

Question 14

Product Code

Answer 14

A unique code given to a product by a supplier or customer to help in recording transactions involving that product

Question 15

Profit

Answer 15

The excess of income over expenses made by a business

Question 16

Quotation

Answer 16

A written statement sent from supplier to customer advising them of the price of a specific good or service (or combination of the two)

Question 17

Remittance advice note

Answer 17

A document sent with a payment setting out which amounts are being paid and whether any credit notes are being applied.

Question 18

Sales Income

Answer 18

What the business earns when it makes sales of goods or services to other parties; can also be called ‘revenue’ or ‘sales revenue’

Question 19

Sole Trader

Answer 19

A business that is owned and managed by an individual

Question 20

Supplier Code

Answer 20

A unique code given to a supplier by a customer when recording transactions that relate to that supplier

Question 21

Till Receipt

Answer 21

The primary documents for a sale or purchase in cash