Chapter 7: Prepare payments to suppliers Flashcards Preview

AAT (L2): FINAL Chapter Summary > Chapter 7: Prepare payments to suppliers > Flashcards

Flashcards in Chapter 7: Prepare payments to suppliers Deck (6)
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1

When is a business ordering goods ready to settle up the supplier's account in the purchases ledger?

When it has checked all the financial documents:

-Invoice
-Delivery Note
-Credit Note

2

What is a common practice for a supplier to send each customer?

Sending a statement of account to each customer

Listing all the transactions
(Sales, Returns, Payments)

Which will then be recorded in the Purchases Ledger Account.

3

Reconcilliation?

The process where the customer checks that the items on the supplier's statement of account.

"Tie Up"

With the items in the supplier's account in the purchases ledger.

4

What must be done with any discrepancies between the supplier's statement of account and the purchases ledger?

They must be identified and investigated.

They will affect the amount of money that will be paid to the supplier.

5

How is payment of the buyer's account made?

The amount is calculated by totaling authorised invoices due for payment

& deducting any authorised credit notes & discrepancies that have been found.

6

How is payment on the due date advised to the supplier?

By completing and sending a remittance advice.

Either with a cheque, or with details of a BACS payment made direct to the bank account of the supplier.