Business finance

• what is the order of the sales order process


  Purchase order, delivery note, invoice,receipt,credit note and statement of account
• what is purchase order

  a legal offer to buy goods of the supplier
• what is a delivery note


  sent to the customer when goods have been delivered
• what is an invoice 


  a request of payment
• what is a receipt 


  a record of payment made by the customer
• what is a credit note 


  lists any goods that have been returned
• what is a statement of account 


  financial summary of the full order over a period of time
• what do financial documents provide

  they provide a record of the trading and financial transactions taking place between the enterprise and the supplier
• what is the purpose for a financial record

  to determine how much tax is owed by the enterprise, provide information for financial statements, track weather goods have been delivered
• what are some of the importance’s of financial accuracy

  to ensure the right goods have been delivered, to check that customer is not being overly charged, to calculate cost, revenue, profit or loss
• what are some of the problems with an inaccurate financial record

  investors may loose confidence in the business, lead to cash flow problems, suppliers may not be paid on time
• prof of using a debit card

  no need for cash and beneficial to make large transactions
• cons of using a debit card

  Can be stolen
• prof of using a credit card

  contactless cards do not require a pin and cardholder receives short interest free period on amount borrowed
• cons of using a credit card


  can be stolen and sellers pay a fee to credit card company each time customer pays buy card
• pros of cash


  accepted in many places
• pros of direct debit 


  simple way to pay regular bills and third party may vary amounts making it a flexible way to collect payments
• cons of direct debit 


  customers must have sufficient money in their bank account to cover payment or the payment will not take place
• What factors can influence choice of payment method


  Ability to pay, lifestyle, technology
• how do you calculate revenue 


  sales X price per unit
• what is an asset

  something owned by an enterprise
• What is a start up cost

  Money you spend to set up your business
• what are the 2 types of running costs

  fixed and variable
• what is a fixed costs

  costs an enterprise must payoff
• What are some common fixed costs

  Insurance and rent
• what is a variable cost

  costs directly related to the number of items produced or sold
• what is turnover

  total revenue received by an enterprise in a given financial period
• What are costs of sales

  Costs of producing goods
• what are current assets


  assets that can be easily turned into money
• types of current assets 


  debtors, inventory and cash
• what is a liability 


  amount of money owed by an enterprise
• what are long term liabilities 


  liabilities that have to be paid off over a ling period of time
• what is a debater 


  someone who owes money to the enterprise
• what is a creditor

  someone who is owed money by an enterprise
• Why are stakeholders interested in the Statement of comprehensive income

  Managers, employees, shareholders