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.
This is a document sent by the seller to the buyer to correct an undercharge on the original invoice. If the buyer was entitled to a discount which was not given or taken care of in the invoice. When the buyer returns empty cases/crates that had been charged in the invoice. If the invoice is in order, the buyer makes arrangements to pay the amount stated.
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
I) If the seller is convinced that the buyer is credit worthy, arrangements are made to deliver the ordered goods or services to the buyer. The recommended unit prices of the products -Any discounts offered Price list show the prices of the commodities at that time. This is a letter written by a potential buyer to the seller to find out the goods and services offered by the seller. A closed economy or trade lose the opportunity to get advanced and latest products and services with... Commercial banks are of utmost importance to home and foreign trade. This will be sent to a customer advising them of anything that is relevant to the product or service that they are paying for, such as delivery dates.
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.
The pay-in-slip is a proof of transaction document received from a bank for depositing money into a bank account. The process involves filling up a form at the bank, with details of the depositor, date of transaction, and amount deposited. Pay-in-slip must be signed by the bank clerk with the official bank stamp on the counterfoil. Bookkeepers use the pay-in-slip counterfoil as a source document for recording the transaction. When any money is received, the person who receives it should immediately write out a receipt. A receipt is evidence of payment and must be sent to the payer .
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.
It is beneficial to all companies irrespective of their size. A consular invoice is therefore a special invoice which customs authorities request from the importer to enable them to know the appropriate duties chargeable. The invoice will ensure correct payment of duties by showing the correct price of the goods. It is a special form of invoice legalized by a consul in an importing country. B) Deferred payments - that goods or service are not paid for in full on delivery.
It is made out of duplicates that are original to the buyer and duplicate to the seller . It is issued in the event of sales return . The person who delivers the goods must provide proof that he has done so, and a delivery note is written evidence of this. They are usually written out in duplicate by the seller, duplicate retained by the seller and original for the carrier keeps after the buyer has signed it. All business documents through home trade serve as evidence of a transaction. Some are used to do further recording but basically, they are written evidence of a transaction between two people or businesses.
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.
If the cheque is stalc i.e. presented for payment after six months from the date of issue. It is a document of title that shows the owner or buyer of the goods. It therefore gives power to the owner or consignee to obtain delivery of the goods. Ii) Import Trade - buying of goods and services by one country from another country or by individuals in one country from individuals in another country. I) Export Trade - sale of goods and services by a country to another country or individuals in one country to another country or individuals in one country to individuals in another country.
They are instead paid in future in a lump sum or in several instalments. This stage involves the seller requesting or demanding for payment from the buyer for the goods or services delivered. Iii) Delivery note This is a document sent by the seller to the buyer to accompany the goods being delivered. An acknowledgement note is a document sent by the seller to the prospectiv buyer to inform him/her that the order has been received and it is being actedupon.
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