Chapter 5- Process Payments from Customers Flashcards Preview

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Flashcards in Chapter 5- Process Payments from Customers Deck (18)
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1
Q

what financial documents are included in a sales transaction made on credit?

A
  • invoice
  • credit note
  • customer statement
2
Q

what does the invoice set out?

A
  • the date
  • the sales price and any discount given and VAT added
  • the total due
  • the date when payment is required
3
Q

what does the credit note do?

A
  • this is used if any refund is due because of a faulty item etc and can be deducted from the amount owed to the seller
4
Q

what does the customer statement do?

A
  • sets out all the invoices and credit notes issued
  • sets out any payments received over a set period
  • results in the final amount due
5
Q

what is remittance advice?

A
  • an advice received from a customer telling the seller that a payment has been made
6
Q

how can remittance advice be delivered?

A
  • posted, faxed, emailed

- it states that a certain amount of money has been sent by a credit customer in settlement of account

7
Q

what is remittance advice used for?

A
  • to advise the sending of a payment direct to a sellers bank account
  • to accompany a cheque
8
Q

what is BACS payment?

A
  • Bankers Automate Clearing Services (an electronic bank transfer system which makes payment direct from one bank account to another)- often used for bulk payments
9
Q

what is faster payment?

A
  • an electronic bank transfer system which makes payment direct from one bank account to another (often used for individual payments)
10
Q

what is a cheque?

A
  • an order to a bank to pay a stated amount from the drawer’s account, written on a specially printed form
11
Q

what checks need to be made on the remittance advice for faster payments?

A
  • needs to be checked against sales documentation and sales ledger account of the customer paying
12
Q

why do the checks need to be made on the advice for faster payments?

A
  • to make sure there’s no errors or discrepancies

- makes sure the right amount has been sent for the right transactions

13
Q

what checks need to be made on the remittance advice for cheques?

A
  • its in writing and signed by the person/organisation paying the money
  • details are accurate and correct
  • name after ‘pay’ is correct
  • the cheque is in date
  • the amounts in words & figures are the same
14
Q

why do the checks need to be made on the advice for cheques?

A
  • ensures the cheque can be an acceptable payment method
15
Q

when can discrepancies occur on remittance advice?

A
  • if there’s an underpayment
  • if there’s an over-payment
  • if the buyer has made a mistake deducting PPD
16
Q

what is an underpayment?

A
  • not enough money has been sent to the seller
17
Q

what is an overpayment?

A
  • too much money has been sent to the seller
18
Q

what is prompt payment discount?

A
  • an early payment discount, where a seller allows a customer to deduct a percentage discount from the invoice total if payment is made within a specific time