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BUSINESS

DOCUMENTS

(Higher)

JUNIOR CERT

PAPER

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2

Short questions with Documents

2012

Mark-Up

Delivery Docket

Processing Delivery Dockets

Credit Note

Sales Returns Book

SQ – Q.18

2011

Effective Purchasing

Processing Invoices

Invoice

Receipt

Sales Book & Analysed Cash Book

2010

Credit Rating

Processing Statements

Statement

Receipt

Analysed Cash Book

SQ – Q.10

2009

Quotation

Processing quotation

Order Form

Credit Note

Sales Returns Book

SQ – Q.9

2008

Enquiry

Mark-Up

Processing Receipts

Invoice

Receipt

Sales Book & Analysed Cash Book

DEFINITE QUESTION EVERY YEAR!

USUALLY QUESTION 2!

2007

VAT & Trade Discount

Processing Quotations

Effective Purchasing

Complaints

Credit Note

Sales Returns Book

SQ – Q.17 & Q.18

2006

Selling goods on credit

Credit Rating

Processing statements

Statement

Receipt

Purchases Returns Book

SQ – Q.13

ORDINARY LEVEL

2012

Invoice

Cheque

Receipt

2011

Order

Invoice

Bank Account

2010

Order

Delivery Docket

Invoice

Cheque

Q.15 Receipt

2009

Invoice

Cheque

Bank Account

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As in any business deal, there are 2 parties – the buyer and the seller.

Throughout the course of any business dealings, many documents pass

between both parties. The information in these documents is used as

information to write up day books and so are called source documents.

There is normally one person responsible in every company for

purchasing and that is the Purchasing Manager. To do their job properly,

they must be effective in their purchasing.

Effective purchasing involves buying the right quantity and quality at the right time and

price.

In order to keep track of transactions, a business will issue these

documents which are a written record of what happened and are filed for

future reference.

There are 8 main documents:

1. Letter of enquiry

2. Quotation

3. Order

4. Delivery Docket

5. Invoice

6. Credit Note

7. Statement

8. Receipt

1. LETTER OF ENQUIRY Nowadays, enquiries are normally done by email because of the speed of

the response. However, enquiries can also be made by:

Letter

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Phone call

Call into the shop in person

Fax

Text Message (Not used much)

Information about products can also be found:

On websites

Classifieds in the newspaper

Advertisements such as TV ads and billboards

Trade associations

Other businesses

2. QUOTATION

Your address

Their address

Date

Greeting

__________

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TERMS OF SALE

1. Carriage paid – Seller will pay to deliver the goods

2. CWO – Cash With Order means payments must be made when ordering the

goods. Buying from websites is an example.

3. COD – Cash On Delivery means payment must be made when the goods are

delivered.

4. Cash Discount – Given to customers who pay promptly within the written

period of time. In this example, the buyer will get a discount of 5% if they

pay within 10 days of receiving the goods.

5. Trade Discount – Reduction in the selling price for people in the same line

of business e.g. car manufacturing company would get a discount from a

tyre company and vice versa.

6. VAT - Value Added Tax is a tax on consumer spending. A tax is placed on

each good and service at each stage of the channel of distribution so that the

government doesn’t have to wait for the item to be sold.

E & OE

Errors and Omissions Excepted – Means that the person issuing the quotation,

statement or invoice is clear from blame if there is a mistake on it. To resolve

this, a new quotation, statement or invoice is issued.

3. ORDER Goods can be ordered by any means but it is better to have it in writing.

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CHECK STOCK

It is now necessary for the supplier to check if the goods the customer wants are

in stock. It is very important for businesses to have the correct level of stock. A

good stock control system involves:

• Having the correct level of stock

• Stock in good condition

• Prevent wastage and theft

• Accurate records of sales and purchases

• Regular stocktaking

• Good storage facilities

• Computerised reordering system

CHECK CREDIT RATING

When a business sells good on credit, buyers become debtors. Important that

these debtors do not become bad debtors (cant repay what they owe). To

prevent this, sellers carry out credit checks on the customer. It can do this in 3

ways:

1. Contact Irish Credit Bureau

2. Ask for a bank reference (to see if they have paid back loans)

3. Ask for a trade reference (to see if they have paid back previous bills)

4. DELIVERY DOCKET Issued by seller and lists the goods being delivered.

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5. INVOICE An invoice is the document sent from the seller to the buyer and has the

following information:

Invoice No.

Order No.

Customer No.

Date order processed

Must be signed

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Quantity of goods

Description of goods

Price per unit and total price

Terms of trade including discounts

Carriage details and terms

VAT details

E &OE (Errors & Omissions Expected)

The invoice is the source document for the sellers sales book and the buyer’s

purchases book.

Discount is subtracted

VAT is added

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6. CREDIT NOTE The invoice is the source document for the seller’s sales returns book and the

buyer’s purchases returns book. It shows a reduction in the amount owed by

the buyer.

A credit note is sent:

If the buyer has been overcharged

If some of the goods were not delivered

If some of the goods were damaged

If some of the goods didn’t match what was ordered

Discount is subtracted

VAT is added

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7. STATEMENT The statement is sent by the supplier and gives a summary of transactions that

have occurred within a particular period. It shows the opening balance (money

owed at the start of the period)

Invoices Cheques

Credit Notes

C for CREDIT, C for CHEQUE, C for CREDIT NOTE

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8. RECEIPT Written acknowledgement of payment which is signed by the seller and given to

the buyer.

IF ASKED HOW TO PROCESS DOCUMENTS....

CHECK, COMPARE & FILE

CHECK

Prices

Quantity

Model Numbers

Name & Address of supplier

Discounts

Etc

COMPARE AGAINST

Previous document e.g. compare the order with the quote, compare the

delivery dockets with the order, compare the statement with the invoices

and credit notes, etc

FILE IT.....for future reference.