Chapter 6 & 7

A statement of account is a

• list of all the goods sold to a customer

• summary of all transactions over a period

• refund of an overcharge made

• letter advising customers that have not paid their accounts

If a customer receives a credit note from a supplier, this means

• their account is no longer in credit

• they need to make a further payment

• they have been overcharged by the seller

• they have been undercharged by the seller

After the supplier agrees to supply the order, the goods

are delivered with an _______________ showing the cost of the order.

• invoice

• statement of account

• debit note

• credit note

Credit notes are issued for which of the following reasons

• when goods are returned to the seller

• when there was an overcharge on the goods

• when there was an undercharge

• when faulty goods are returned to the seller

A document sent monthly, summarises orders made, payments and credits on a customers account

• voucher

• Statement of Account

• Receipt

• Invoice

Proof of purchase and payment

• Invoice

• Cheque

• Receipt

• Cheque counterfoil

What could the effect be if a receipt is missing?

• The customer will not receive a proper refund

• The customer will not be able to tell the supplier which items are damaged

• The business couldn't prove that goods had been paid for

• The customer would not know how much to pay for goods

What could be the effect if a credit note contains mistakes?

• The customer will not receive a proper refund

• The customer will not be able to see which items are damaged

• The business would not receive any profits

• The business could not prove goods had been paid for

A system of recording and reporting financial activity is called

• Financing

• Accounting

• Auditing

• Budgeting

Which business documents are used to write up the sales returns journal?

• credit notes issued to customers

• credit notes received from suppliers

• invoices issued to customers

• invoices received from suppliers