L03

Question 1

What is cash on delivery?

Answer 1

Payment for goods on delivery rather than before or after

Question 2

What is errors and omissions excepted?

Answer 2

A disclaimer on and invoice or similar transaction to show supplier has reduced legal liabilities for miscount in large numbers

Question 3

What is T&C’s

Answer 3

Restrictions or statements relating to delivery charges , payment terms

Question 4

What are terms

Answer 4

The time by which payment is expected

Question 5

What is a purchase order

Answer 5

Legal document between supplier and buyer which lists items bough and purchase price.

States delivery date and payment terms

Question 6

What is an invoice?

Answer 6

a business issues to customers requesting payment for goods and services

Question 7

What is a credit note

Answer 7

Sent by seller to buyer of goods have been damaged or error has been made on invoice. Is an offset for future purchase or refund given.

Question 8

What is a statement of account

Answer 8

Issued by supplier to customer at end of each month states all transactions over the period including invoices payments received and credits applied. Final balance shows total owed by customer.

Question 9

What is a document used for an payment to employee

Answer 9

Travel expense claim form

Question 10

What internal documents can be used

Answer 10

Petty cash voucher
stock requisition form
IT requisition form
Reprographics requisition form

Question 11

What is a petty cash voucher?

Answer 11

Held to reimburse staff for small purchases made on behalf of business

Question 12

What is a stock requisition form?

Answer 12

Completed when goods need to be ordered for relevant use

Question 13

What is a IT requisition form?

Answer 13

Request for IT equipment to be ordered or purchased

Question 14

What is a reprographics requisition form?

Answer 14

Completed by an employee requiring either photocopying or other reprographics services , e.g booklet being produced or paper laminated.

Question 15

What is a bank statement

Answer 15

Summarises transactions into and out of bank account over a period of time

Question 16

What is a budget variance report?

Answer 16

A budget variance is the difference between budgeted income and expenditure , useful in decision making

Question 17

What is a favourable variance

Answer 17

Figures are better than budgeted figures

Question 18

What is it when the figures or worse than budgeted figures in budget variance report

Answer 18

Adverse variance

Question 19

What is a delivery note

Answer 19

Document that accompanies shipment of goods which details products and quantities delivered. Customer needs to sign to confirm delivery

Question 20

What is a Goods received note

Answer 20

Documents used by the customer for checking items received to ensure they match purchase order.

Question 21

What is a payslip

Answer 21

Employees record of the pay they have received.

Question 22

What is a receipt

Answer 22

Evidence goods or services have been purchased and the amount paid.

Question 23

What is remittance advice

Answer 23

Sent by a customer to supplier to inform them their invoice has been paid, usually when payment done online.

Question 24

What is a request to repair form

Answer 24

Internal document to request repair for printer for example.

Also be external if a company lease a photocopier and contract includes maintenance.

Question 25

What is a cheque

Answer 25

Document that requests one amount of money is taken from payers bank account to payee

Question 26

What are the advantages to the payer of cheque

Answer 26

Can be sent via post Large amounts of cash do not need to be handled Payer has a record of payment being made

Question 27

What is disadvantage to payer of cheque

Answer 27

Cheques need to be signed by two people which is time consuming

Question 28

What is advantages of payed of cheque

Answer 28

Safer to carry cheque rather than large amounts of cash to bank

Question 29

Disadvantage of cheque to payer

Answer 29

Must be paid in bank Errors cause delayed payment Cheques have to be clear Cheques can bounce if payer has sufficient funds

Question 30

What is a credit card

Answer 30

Enables payer to make payment without the funds in bank

Question 31

What is advantages to the payer of a credit card

Answer 31

Payment can be made even if insufficient funds in account Degree of protection from fraud Can be used online

Question 32

Disadvantage to payer of using credit card

Answer 32

Charged interest in full amount isn’t repaid by given date | Sometimes a fee for using credit cards

Question 33

Advantages to the payee of credit card

Answer 33

Credit card company authorised payment

Question 34

Disadvantage of credit card to payee

Answer 34

Payees must pay pay a processing fee which reduces amount received

Question 35

What is a debit card

Answer 35

Funds transferred from payers bank directly into payees bank

Question 36

Advantages of payer of debit card

Answer 36

Large amounts of cash need to be handled | Can be used for online payments

Question 37

Disadvantage to payer of debit card

Answer 37

Some businesses charge additional fees to customer | If sufficient funds not in bank account payment cannot be made

Question 38

Advantage to payee of debit card

Answer 38

Payee is guaranteed to get payment

Question 39

Disadvantage to payee

Answer 39

Payee must pay a processing fee