Business Documents

• Invoice: is a document issued by the supplier of the goods credit showing details, quantities and prices of goods supplied.

  • Contents: The name & address of the supplier & customer, the date. Full details, quantities & the prices of goods sold
  • Issued when: Goods on credit are sold by the supplier. It can also be issued when goods are sold for cheque/cash.
  • Notes: Trade discount is shown as being deducted, whereas it is mentioned that cash discount is only allowed if the invoice is paid within a time limit.
  • Uses: Customer records Cr purchases & Supplier records Cr sales.
• • Dr note: is a document issued by a purchaser of goods on credit to request a reduction in the invoice received.
  • Contents: Name & address of supplier & customer, date, full details & quantities (sometimes prices) of goods returned or overcharged
  • Issued when: Goods are not satisfactory, wrong goods, overcharge, etc.
  • Uses: Merely a request to the supplier to reduce the total of the original invoice | No entries made.
• • Cr Note: is a document issued by a seller of goods on credit to notify of a reduction in an invoice previously issued.
  • Contents: Name & address of the supplier & customer, date, full details, quantities & prices of goods returned or overcharged
  • Issued when: Faulty goods/ overcharged goods. Issued by the supplier
  • Notes: Sometimes printed in red/any other color to distinguish between an invoice
  • Uses: Customer records return outwards & supplier records return inwards.
• • Statement of A/C: is a document issued by a seller of goods on credit to summarize the transactions for the month.
  • Contents: Name & address of supplier & customer, date, balance owing at the start of the period, invoices & Cr notes issued, payments received, any cash discounts allowed, balance owing at the end of the period.
  • Issued when: At the end of each month by a supplier. Given to each customer.
  • Uses: No one makes any entries. Reminder to the customer of Amount Outstanding & can also be used to check for errors for both.
• • Cheque: is a written order to a bank to pay a stated sum of money to the person or business named on the order.
  • Contents: Pre-printed details. The date, amount & payee have to be filled.
  • Uses: Supplier: Counterfoil of paying-in slip used to make an entry in cash book & for discount allowed. Customer: Uses the cheque counterfoil to make cash book entry & discount received.
• • Receipt: is a written acknowledgement of money received and acts as a proof of payment.
  • Issued when: Goods sold by cash, and not when by cheque (the cheque acts as one)