L03 -Be Able To Use Business Documents Flashcards
1
Q
Transaction documents
A
- A transaction documents refers to transaction (a financial exchange) between two parties, it can be printed or electronic
- It may contain COD (Cash On Delivery) - pay for goods on delivery rather than before or after delivery
- It main contain errors and commissions expected, a disclaimer on an invoice or similar transaction document showing that the supplier is attempting to reduce any legal liability due to administrative errors and inaccuracies
- T&SC’s restrictions or statements relating to delivery arrangements or payment terms
- Terms the time by which payment is expected
2
Q
Types of transaction documents - Purchase order
A
- A legally binding document between a supplier and a customer/buyer. It lists the items that the buyer has ordered and agreed the purchase price. It may also state the delivery date and payment terms for the buyer
3
Q
Types of transaction documents - Invoice
A
- This is a document that a business issues to customers requesting payments for goods and services
4
Q
Types of transaction documents - Credit Note
A
- This is sent by a seller/supplier to a customer if e.g. goods received by a customer have been damaged in transit, an error has been made on the invoice such as incorrect discount being applied or a customer returns on item.
- The credit note can be an offset against future purposes or a refund can be given
5
Q
Types of transaction documents - Statement of Account
A
- Issued by a supplier to a customer usually at the end of each month
- States all transactions over the last period including details of invoices, payments and credits applied
- Final balance shows the local amount owed by the customer on that date
6
Q
KEY TERM - Payment terms
A
When payment should be made by the buyer/customer to the supplier
7
Q
Employee documents - Travel Expense Claim Form
A
- When employees travel as part of their role, they can claim expenses (petrol, train fares, car parking and sometimes refreshments.
- If an employee uses their own car they can record the journey mileage as petrol costs are usually reimbursed at x pence per mile
- Travel expense claim forms often need to be signed by a line manager to confirm that the journey was necessary and that only allowable expenses are being claimed for
8
Q
Employee documents - Petty Cash Voucher
A
- Petty cash is held to reimburse staff for small purchases made on behalf of the business e.g. buying stamps
- A form that records the amount removed from the petty cash float by an authorised person
- The employee will need to provide a receipt, which will be attached to the petty cash voucher as part of purchase
9
Q
Employee documents Stock requisition form
A
- Completed when goods need to be ordered for relevant use e.g. printer paper or a filing cabinet
- Completed form is sent to the purchasing/procurement department which then if the requisition is authorised, the goods on behalf of the employee/department
10
Q
Employee Documents - IT Requisition Form
A
- This is a request for IT equipment to be ordered, purchased including laptops, printers and portable drives.
- The form is similar to a stock requisition form and is completed by the employee or manager requesting the equipment and then forwarded to the purchasing function are authorised by a senior member or staff
11
Q
Employee Documents - Reprographics requisition form
A
- This is completed by an employee requiring either photocopying to be done or other reprographic services e.g. booklets being produced or signs being laminated
12
Q
What is a bank statement ?
A
- This summarises transactions into and out of a bank account over a period of time, usually a month
- The accounts function will monitor the business’ bank account by carrying out bank reconciliation by checking the inflows and outflows recorded on the bank statement against its own records
- Indicates funds available for making purchases or paying bills
13
Q
What Is a budget variance report?
A
- Difference between budgeted income and expenditure and the actual income and expenditure figures
- Summarises the differences and it is using in decision making process
14
Q
KEY TERM - Budget
A
Planned income and expenditure over a period of time
15
Q
KEY TERM - Favourable Variance
A
Where the actual figure is better than the budgeted figures
16
Q
KEY TERM - Adverse Variance
A
Where the actual figure is worse than the budgeted figure
17
Q
What is a delivery note
A
- A document that accompanies a shipment of goods, it details the products and the quantities delivered
- The customer will sign the delivery note to confirm that the correct items/number of items delivered
- Any issues such as missing or damaged products will be highlighted
- The supplier then refers tot he delivery notes when issuing the invoice for the delivery
18
Q
What is a goods received note
A
- Used by customer for checking items received to ensure they match the purchase order
- Once checked and any discrepancies highlighted, a copy will be returned and accounts staff, who check the goods received note against the invoice from the supplier to ensure that payment is made for the correct number of items
- Many business’ use electronic systems to check deliveries and transfer this information to the accounts function
19
Q
What is a payslip
A
- An employee record of pay they have received
- Gross pay is the amount before deductions and net pay is amount employee will actually be paid after deductions
- Any deductions will be listed, including income tax, national insurance, contributions, pension contributions, charity donations and student loan repayments
20
Q
What is a receipt
A
- Evidence that goods and services have been purchased and the amount paid
- Likely to detail the date, business that goods or services have been supplied and payment method used
21
Q
Remittance advice
A
- Notification sent by a customer is a supplier informing them that their invoice has been paid
- Traditionally, when payments were made by cheque the remittance advice was sent in the post accompanying the cheque
- Remittance advice is more likely to be sent to the supplier once electric payment has been made
22
Q
What is a request for repair form
A
- An internal document that can be completed and sent to the maintenance team
- Also be external that is completed and sent to an external repair company
- A form sent to an external business will require additional details to an internal form such as the company name and address
23
Q
KEY TERM - Leasing
A
A method of financing a fixed asset whereby the lessee pays to rent (lease) the assets from the leaser
24
Q
What is a cheque
A
A document requesting that a specified sum of money paid from one persons account to another
25
What are the advantages of cheques for the payer
- Can be sent via post
- Large amounts of cash don't need to be handled
- The draw has a record of the payment being made
26
What are the advantages of cheques for the payee
- It is safer to carry a cheque than large amounts of cash to the bank
27
What are the disadvantages of cheques for the payer
- Cheques for business accounts often need to be signed by two people which can be time consuming
28
What are the disadvantages of cheques for the payee
- Cheques must be paid into bank which can be inconvenient
- Any errors on the cheque delay payment
- Cheques have to be cleared before any money can be withdrawn or sent
- Cheques can bounce
29
What is a credit card
- Enables an individual or business to make payment for goods or services but in effect they are borrowing money from the credit card company
- Company transfers the money to the payee and the payer then owes that amount to the company
- If the debt is paid when requested then no interest in charge, however, if the full amount is not repaid interest is charged in outstanding balance
