Business documents

• An invoice is a document that is issued by the supplier of goods on credit showing details, quantities, and prices of goods supplied
• Trade discount is a reduction in the price of goods, the rate depends according to the quantity purchased.
• Invoice is given/received

  1. the customer receives the original invoice and uses it to record the purchase of goods on credit.
  2. the supplier keeps the copy of the invoice and uses it to record the sales of goods on credit.
• A debit note is a document issued by the purchaser of goods on credit requesting a reduction in the invoice received.
• 1. neither the supplier nor the purchaser makes any entries in their accounting records.
  2. a debit note is merely a request to reduce the total of the original invoice.\
• a credit note is issued by the supplier of goods on credit to notify a reduction in the invoice previously issued.
• 1. the customers receives the original credit note and uses it to record purchase returns.
  2. the supplier keeps a copy of the credit note and uses it to record the sales return.
• statement of account is a document issued by the supplier of goods on credit to summarize the monthly transactions.
• 1. neither the supplier nor the purchaser make any entries in their accounting records.
  2. statement of account is a reminder to the purchaser of goods on credit for the amount outstanding.
• a cheque is a written order to the bank to pay a stated sum of money to the person or business named on the order.
• 1. the supplier receives the cheque
  2. the customer keeps the cheque counterfoil and uses it to make the entry in the cash book.
• a receipt is a written acknowledgement of the money received and acts as a proof of payment.