chapter 1 definitions Flashcards
(20 cards)
what is the accounting system order
business transaction
business document
book of prime entry
ledger account
trial balance
what is a trade discount
a definite amount deducted from the list price of the goods for the supplies to some customers, with the intention of encouraging and rewarding customer loyalty
what is bulk discount
it is an amount deducted from the price of goods and disclosed on the invoice. it is given by a supplier for orders above a certain quantity
what is a prompt payment discount
also know. as settlement or cash discounts it is offered to customers to encourage early payment of invoices
what is a purchase order
a buyer-generated document that authorises a purchase transaction
what is a sales order
a seller-generated document that authorised a sale to a customer,issued after the receipt of purchase order
what is a delivery note
a document acompanying goods despatched to a customer explaining what the delivery contains
what is the goods received note
a goods received note is an internal document completed by the purchaser that the details of goods received contains similar information to a delivery note
sales invoice
a sales invoice is a document that itemises a transaction between a buyer and a seller, it is a request for the buyer to make payment for goods sold or services provided by the seller
what is VAT (sales tax)
VAT is consumption tax added to a products selling price. it represents a tax on the ‘value added’ to the product at each stage of production or supply process
what is output tax
output tax is charged on the sales of goods and services
what is input tax
input tax is the tax paid on the on the purchase of goods and services
what is VAT charged on
charged on the taxable supply of goods and services in the united kingdom by a taxable person in the course of a business carried on by that person
what is net of vat
a net amount exudes vat
(vat not included)
what is gross of vat
a gross amount includes vat
what is a invoice
a document that itemises a transaction between buyer and a seller
what calculations should be checked on a invoice to make sure they are correct
all pricing calculations
any trade or bulk discount calculations
vat calculation
the total addition of the invoice
what is a credit note
document issued by a supplier to a customer cancelling part or all of a sales invoice
what is a goods returned note
document sent to the supplier by the customer detailing the goods returned and reasons (s) for the return being made
why does a business issue credit notes
when a customer has returned faulty or damaged goods
when a customer has undamadged goods by agreement with supplier for a refund
to make a refund for shirt deliveries
to settle dispute with customer
to adjust an account after taking advantage of prompt payment discount.
