BUSINESS DOCUMENTS

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BUSINESS DOCUMENTS
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Stages of Financial Recording
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Business Documents Sequence
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Letter of Enquiry

• Finding out information about the products and
  services available, prices of goods and delivery
  options
• Treatment of Letter of Enquiry

Buyer Seller
Check name and address are correct File a copy of the letter of enquiry Check the name and address Send a quotation File the letter
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Quotation

• It is sent based on the letter of enquiry giving
  information of the goods available, price and any
  discounts and delivery options
• Treatment of Quotation

Buyer Seller
Compare all the quotations for the best deal File the quotation Check name and address are accurate File a copy of the quotation sent
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Order

• Based on the best quotation, the buyer places an
  Order with the seller to send the goods and the
  terms outlined in the Quotation
• Treatment of Order

Buyer Seller
Check the name and address File a copy of the Order placed Check the name and address against the quotation Check the stock levels and credit rating File the Order
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Delivery Docket

• This document provides proof that the goods were
  delivered and have them checked before signing
  the docket
• Treatment of Delivery Docket

Buyer Seller
Check the name and address Check that they are the correct goods ordered File a the delivery docket Check the name and address Check the details according to the order File a copy of the delivery docket
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Invoice

• Sent by the Seller outlining the quantity,
  description and price of the goods and any
  discount which has been offered.
• Treatment of Invoice

Buyer Seller
Check the name and address are correct Check that they are the correct goods as per order Check the calculations File the invoice Check the name and address Check the details are correct Check the calculations File a copy
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Letter of Complaint

• This is only sent if the goods ordered are
  incorrect or damaged and buyer is seeking a
  replacement or discount.
• Treatment of Letter of Complaint

Buyer Seller
Check the name and address Check the details are correct as per order and invoice Identify the problem File a copy Check the name and address Check the details as per order and invoice Investigate the problem with the goods delivered File the letter of complaint
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Credit Note

• Offered by the seller to the buyer an alternative
  to cash so the buyer can order different goods at
  a reduced price.
• Treatment of Credit Note

Buyer Seller
Check the name and address Check the details with the letter of complaint Check the calculations File the credit note Check the name and address Check the details with the letter of complaint File a copy of the credit note
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Statement of Account

• The seller issues this to the buyer at the end of
  the month outlining the transactions that have
  taken place and the money owed.
• Treatment of Statement of Account

Buyer Seller
Check the name and address Check the calculations File the statement Check the name and address Check the calculations File a copy of the statement of account
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Cheque

• Payment made by the buyer to the seller for goods
  purchased on the amount owing.
• Treatment of Cheque

Buyer Seller
Complete the cheque correctly and counterfoil Check the name and amount is correct Check the details are correct on the cheque
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Receipt

• A receipt is proof of purchase by the buyer and
  that the goods were paid for.
• Treatment of Receipt

Buyer Seller
Check the details are correct on the receipt File the receipt Complete the receipt Check the name and the amount is correct
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Mark up Formula

• Profit x 100
• Cost Price 1
• An item costing 40 is sold for 55. Calculate
  the mark-up?
• 15 x 100
• 40 1
• 37.5

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Margin Formula

• Profit x 100
• Selling Price 1
• Cost price 40 and the selling price is 50.
  Calculate the profit margin.
• 10 x 100
• 50 1
• 20

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Exam Question (2010 P2 Q2)