The sales system Flashcards
What are cash transactions?
-buy now, pay now
What are credit transactions?
-goods received, pay later
What are the 11 steps in the sales system?
- purchase order from customer
- internal sales order
- confirmation from customer to confirm order
- advice note sent to customer
- goods dispatched to customer
- delivery note accompanies goods
- sales invoice sent to customer
- list sales in sales daybook
- statement of account sent to customer at end of month
- credit note may be released for a return
- remittance advice
What is an advice note?
-confirms delivery date for goods
What is remittance advice?
-sent by customer with payment
What should a sales invoice include?
- supplier address
- customer address
- invoice number
- date
- goods description
- quantity
- goods unit amount
- total
What type of transactions are recorded in the sales daybook?
-ONLY CREDIT CUSTOMERS
What is the double entry for the sales daybook?
Dr rec, Cr VAT, Cr Sales
What is the statement of account?
-lists all transactions for the period
What is a stop list?
-list of customers who we shouldn’t sell any more goods yo unless they have paid overdue amount
What does E&OE?
errors and omissions expected
-allows suppliers to correct errors on an invoice at a later date
What is ROT?
retention of title
-supplier retains ownership of goods until they have been paid for
What is a proforma invoice?
-not a VAT invoice
-a demand for payment
-lets customer know what payment needs to be made in order to receive the goods
