Table of Content
One of the benefits of using an electronic purchase order is to be able to track orders, access reports, and process payments much faster. An invoice is a bill for a service or product that has been supplied to a customer. An invoice is only used for credit sales; a sale that has been paid for when it was ordered will be recognized with a receipt. This is sent to the buyer from the seller and gives all the information that is pertinent to the product or service being sold, such as price, delivery charges and product information.
Required.Record the above transactions in appropriate journals. May 15 Goods worth ksh.1,850 were sold to Jack on credit. May 10 Bought three office machines at ksh 2,500 each on credit from Fine elecronics.
COMMONLY USED DOCUMENTS IN HOME TRADE
Credit Basis - payment is made after a specified period from the date of delivery of the goods or the provision of the services. I) Home trade - buying and selling of goods and services within the boundaries of a given country. It is further divided into retail trade and wholesale trade. Reasons why a seller would send a credit note to a buyer/circumstances under which a credit note is sent to a buyer.
When the invoice is prepared several copies are prepared at the same time one of thes copies is the advice note which tells the buyer that the products have been dispatched. Is another type of invoice which is sent with the goods to the buyer. Is the bill completed by the seller for the goods bought on credit.
Documents Used in Home Trade
Business must record all their credit sales or credit purchases in this document. They are usually made out in duplicate, original for the buyer and duplicate for the seller. They are sent with goods although sometimes they may be sent separately. A sales order is an internal document generated by the seller and kept on file specifying the details about the product or services ordered by the customer. A sales order should record the customer’s originating purchase order which is an external document.
They usually carry information such as the customer’s name, shipping address, transaction date, products ordered, descriptions, units of measure, quantities, prices, and taxes. Many sales orders are no longer paper-based, but rather electronically. If the goods are returned to the seller for any reason at all he must write out a credit note to show that he has received the returned goods and that he has credited the buyer account. They show the same details as an invoice except that they are printed in red so that they are not confused with invoices.
FUNCTIONS OF RETAILERS
An alternative to a quotation is a catalog detailing all, and more, information that is on the quotation document. Account payee only-Means the cheque should be deposited in the account of the payee. These are various means of payments that can be used. An IOU is a document written by the buyer and sent to the seller to acknowledge a debt. It takes place after the invoice has been received and ascertained to be correct or where necessary,corrections made. V) Both allow for adequate time within which to organize for the payment of the value of the bill or note.
Businesses which offer services issue a document called a bill, which serves the purpose of an invoice. This document is used when goods are delivered to the buyer by public means of transport e.g. by trains. This is a document prepared by a transporter to show that he/she has been hired to deliver specified goods to a particular buyer.
What are the documents used in home trade?
As an organization grows, verbal agreements are no longer satisfactory. It becomes impossible to remember everything that is said or agreed on and so it is put down in document form. A delivery note is given at the same time that products are delivered and they enable the customer to check that what they have received is correct and what they have paid for. It is also usual for these documents to have some kind of reference on them. Debit cards are used to make payments from money held in ones accounts and are therefore an alternative to cash payments.
Asking for the availability of goods, their sizes, prices, delivery dates and terms of sales. Quotations so as to compare prices and terms of payment. The purpose of the credit note is to reduce the total invoice amount by the amount of the overcharge. Iv) It is used as a source document in recording the transaction in the book of accounts.
Creditor a specified sum of money at a specified time/date. EFT is a method of transferring money from one account to another where computers are used. It is a contract between the exporter and the shipping company. It is therefore an evidence of the contract to carry the goods. State two uses of indent in international trade. Cash Basis - goods are paid for before or on delivery or a short while after delivery.
They enable a person to travel without having to carry a lot of cash. Bearer, who usually would have bought that cheque from issuing bank. It is therefore more readily acceptable than personal cheques.
Relatively secure when the sender uses the correct phone number of the receiver. The agents e.g. m-pesa agents are located in most parts of towns and also in rural areas. Money can hence be sent and received anywhere and anytime. If you would like to contribute notes or other learning material, please submit them using the button below.
It may accompany the goods of it may be sent separately. Is usually printed in red or pink to distinguish it from the invoice because it represents money going out of the business 12. Is prepared by the seller at the end of a trading period usually a month. Is the document which shows that a payment has been made. Once the order is received by the seller, he will send the goods to the buyer, enclosing an invoice.
Documents Used in Home Trade 2
A cheque is dishonored if the bank refuses to pay and returns the cheque to the drawer. The person presenting it to the bank is the one who is paid. These are the methods or ways the buyer may use to settle debts arising from a business transaction. 6000 cash in hand and a bank overdraft of Sh. 2000; during the month the following transactions took.
To enable trade to be conducted on credit with customers who purchase regularly. To enable contact between the buyers and the seller. Using documents when doing business with other companies helps to avoid mistakes as there are many transactions being made in one day 3. Enquiry Quotation/catalogue and price list Order Delivery note Invoice Credit note Statement of account Cheque Receipt 4. Is sent by the buyer to the seller to obtain information about the goods and services offered by the seller.
No comments:
Post a Comment