Flashcards in Chapter 2: Financial Documents for sales Deck (72)
When selling goods and services on credit, a business will deal with a number of documents. The most important are:
How does the seller request payment?
By means of an invoice
Who prepares the credit note?
The credit note is prepared by the seller.
How does the seller remind the buyer of payment due?
By regular statement of account (normally monthly)
Who is the credit note sent to?
The credit note is sent to the buyer.
Types of discounts available?
(Deducted by seller from invoice total)
(Deducted by buyer)
3 reasons of refund by a credit note?
1. Damaged Goods. 2. Shortages 3. Buyer overcharged
How will a refund due to the buyer be acknowledged and documented?
By means of a credit note.
Credit note: Is the invoice number of the original consignment quoted?
The invoice number of the original consignment is quoted.
Coding: What types are documents ususally coded in?
Numeric / Alpha-numeric
Credit note: Where is the reason for issue quoted?
The reason for the issue of the credit note is stated at the bottom of the credit note
Why are documents ususally coded?
For reference purposes.
Credit note: Eg. Of reason for issue?
E.g. 'Damaged' notes
What do financial documents need to be done to, before sending out?
Credit note details: What are the details exactly the same as?
The details are otherwise exactly the same as on an invoice
How soon should any document discrepancies be dealt with?
Statement: Will a seller expect immediate payment for each individual invoice?
A seller will not normally expect a buyer to pay each individual invoice as soon as it is received.
How long are documents usually retained for?
At least 6 years.
Statement: What happens if the seller send invoices for every order?
The buyer could have to make multiple payments during the month.
Seller may be asked to provide.
Statement: What is sent to the seller at the month end?
A STATEMENT of account is sent from the buyer to the seller @ end of the month
Seller receives from the buyer.
Statement: What does it show?
The statement shows what is owed B -> S
Goes with goods from buyer to seller
Statement: How is it prepared?
This statement, which can by typed out / printed by the seller's computer accounting program.
Lists the goods & tells the buyer what is owed.
Sent with goods being returned
Sent to buyer to remind what is owed to the seller.
Buyer finds out price via: