Section 1, Unit 1, Lesson 3

Question 1

Credit transactions

Answer 1

When goods are given to a customer in exchange for an invoice, and money is due within an agreed amount of time

Question 2

Business’s need several extra financial documents when deciding to give credit

Answer 2

These are

Question 3

Quotation

Answer 3

A document that shows how much an item or items will cost.

Question 4

Purchase order

Answer 4

The document that is completed by the customer and sent to the supplier showing what they would like to order.

Question 5

Invoice

Answer 5

Shows the customer how much they owe the supplier for goods purchased on credit

Question 6

Delivery note

Answer 6

This document accompanies the goods that are delivered and is signed by the customer when delivered. It can also be used by the supplier to check the correct goods are being sent.

Question 7

Goods received note (GRN)

Answer 7

This is an internal document that the customer would complete as an extra check that everything has been received that has been ordered

Question 8

Credit note

Answer 8

A document to show a reduction in the amount owing to a supplier due to faulty or damaged goods being supplied

Question 9

Remittance advice

Answer 9

Sent by the customer to the supplier to show that payment of their account has been made

Question 10

Statement

Answer 10

Sent to a customer to remind them how much they owe the supplier, usually at the end of the month.

Question 11

Many different countries have laws which require businesses to keep financial records and documents for a certain period of time. Many reasons for this include to help settle disagreements and for tax authorities to be able to refer to in the future.

Answer 11

In Ireland businesses need to keep their records for six years, you need written permission from the relevant revenue office to be permitted retention of documents for a shorter period.