Business Documents

Learning Objectives Identify Documents in Sales and Purchases Transactions in Business Identify the process involved in recording these transactions. Identify the functions of each document.

Activity Niall Quinn has started a new business venture. Its called Niall Quinn gym Ltd. He would like us to purchase equipment for his business and fill in the relevant documentation

What are business documents Enquiry Quotation Orders Delivery Notes Invoices Debit Notes Credit Notes Statements Receipt

Steps in Purchasing goods Enquiry Quotation Orders Delivery notes Invoices Credit Notes Debit Notes Statements Receipts

Step 1: Letter of Enquiry Is a request from the buyer to a seller for the price and terms of sale of the goods BuyerSeller

Step 2: A Quotation Is a document sent by the seller to the buyer that shows the price of the goods and the terms of sale. Seller Buyer €550 €325 €350

Step 3: Order Is a written request from a buyer to a seller to supply certain goods. The order must be signed by the buyer BuyerSeller

Step 4: Delivery Note A document sent by the seller to the buyer that Lists the goods being delivered Seller Buyer

Step 5: Invoice A document sent by the seller to the buyer Giving details of the quantity, code no and price Of the goods being sent, terms of sale and details of carriage Seller Buyer Sales book Purchases book

Function of invoice 1.Seller uses details to put in sales book and Put in ledgers a/c 2. Seller files a copy of the invoice for permanent record 3. The buyer checks the invoice against the delivery note to ensure goods delivered are the Goods charged 4. Buyer files a copy of the invoice for permanent record

Credit Note Is a document sent by the seller to the buyer Shows a reduction in the amount owed by the buyer SellerBuyer Sales returns book Purchases returns book

Reason for Credit note being sent: 1. If the seller overcharged the buyer, the buyer receives credit note 2. If some of the goods on the invoice were not actually delivered the buyer receives credit note 3. If some of the goods were damaged/ not as described

Debit Note Is a document sent by the seller to the buyer if The customer was undercharged for goods delivered to him/her SellerBuyer

Step 6: Statement Is a document sent by the seller (creditor) to the buyer( debtor) showing the total amount owed by the buyer SellerBuyer

Step 7: Remittance Slip Is attached to the statement sent by the seller And sent back by buyer to the seller when paying the amount owed. Seller Buyer

Step 8: Receipt Is a written document acknowledging payment. It is signed by the seller and given to the buyer Seller Buyer

Terms COD CWO Cash discount Trade discount E&OEVAT Credit worthiness

19R. Delaney Letter of Enquiry Joe Soap Ltd Telephone: High St Fax : Dingle Co. Kerry VAT No. IE To: Swift Products Ltd 10 Main St Cobh Co. Cork 21/11/10 Dear Sir / Madam, I wish to purchase the goods listed below and am seeking a quotation detailing your best prices and terms of sale for same ˝ Colour TVs 20 DVD Players 30 Video Recorders Yours sincerely, Joe Soap Joe Soap Purchasing Manager

20R. Delaney QUOTATION QUANTITY DESCRIPTION Model No. Price each € To: Joe Soap Ltd 11 High St Dingle Thank you for your enquiry. The following are the current prices for the goods referred to in your enquiry Please note that all goods are subject to trade discount of 10% A VAT rate of 10% currently applies to all goods 10 23” Colour TVs TV DVD Players DV Video recorders VR Swift Products 10 Main St Cobh Co. Cork Tel: Fax Carriage paid: E & O E. Cash discount 5% 10 days Quotation VAT Registration No. IE W Co. Kerry Date:_________ 23/11/10

21R. Delaney DELIVERY DOCKET No. 34 Swift Products Ltd. 10 Main St Cobh, Co. Cork Date______________ Quantity Description Model No. 28/11/10 To: Joe Soap Ltd 11High St. Dingle Co. Kerry 10 23” Colour TVs TV DVD Players DV Video Recorders VR 567 Received the above goods in good condition. Signed________________ Purchasing Manager Joe Soap Telephone Fax VAT Registration No IE W. Delivery Docket

22R. Delaney Invoice No. 25 Date: QUANTITY DESCRIPTION MODEL NO. PRICE EACH (€ ) TOTAL € Total excluding VAT Trade Discount 10% Sub-total (Net) VAT 10% Total including VAT To: Joe Soap Ltd. 11 High St Dingle Co. Kerry ” Colour TVs TV , DVD Players DV , Video Recorders VR , /12/102 7, , , Carriage Paid E & O E Swift Products Ltd 10 Main St Cobh Co. Cork Tel Fax VAT Registration No. IE W

23R. Delaney Credit Note No. 34 Date: QUANTITY DESCRIPTION MODEL NO. PRICE EACH (€ ) TOTAL € Total excluding VAT Trade Discount 10% Sub-total (Net) VAT 10% Total including VAT To: Joe Soap Ltd. 11 High St Dingle Co. Kerry. 5 23” Colour TVs TV , DVD Players DV Video Recorders VR /12/102 2, , , Carriage Paid E & O E Swift Products Ltd 10 Main St Cobh Co. Cork Tel Fax VAT Registration No. IE W Ref : Invoice no. 57, being an allowance for:

24R. Delaney STATEMENT No. 96 Swift Products Ltd 10, Main St Cobh, Co. Cork To: Joe Soap Ltd 11 High St, Dingle Co. Kerry VAT Registration IE W Date__________ 20/12/10 Date Details Debit € Credit € Balance € 1/12/10 Balance 5, /12/10 Invoice No. 57 7, , /12/10 Credit Note No. 34 2, , Tel Fax Terms: 5% 10 days Statement

Complete the following extract from a Credit Note € Total (exluding VAT) Trade Discount 25% Subtotal VAT 23% Total (including VAT)

Solution € Total (exluding VAT) Trade Discount 25% Subtotal VAT 23% Total (including VAT)664.20