Discounts and Source Documents

Melanie is a trader. She returns goods to her supplier.

Which document will Melanie send to her supplier?

• credit note

• debit note

• invoice

• statement (of account)

X, a supplier, sells goods to Y, a customer. X allows Y 25% trade discount and 3% cash discount for prompt payment.

Y has just purchased from X goods with a list price of $1000.

What is the correct entry in X’s books of prime entry?

• $750.00 in the Purchases Day Book/ journal

• $750.00 in the Sales Day Book / journal

• $727.50 in the Purchases Day Book/ journal

• $727.50 in the Sales Day Book/ journal

On 1st March X, a trader, sells goods on credit terms to Y, a customer.

Y returns some of these goods to X the following day.

In what order will X issue business documents in March?

• credit note, invoice, statement of account

• invoice, credit note, statement of account

• invoice, statement of account, credit note

• statement of account, credit note, invoice

Where is cash discount first recorded?

• cash book

• journal

• ledger

• purchases book

Y, a customer, returns goods to X, a supplier. X issues a credit note to Y.

In which book of prime entry does Y enter the credit note?

• Purchases Day Book/ journal

• Purchases Returns Day Book / journal

• Sales Day Book / journal

• Sales Returns Day Book/ journal

Where are the personal accounts of customers who buy goods on credit found?

• Purchases Day Book/ journal

• Trade Payables (Purchases) ledger

• Sales Day Book / journal

• Trade Receivable (Sales) ledger

Which document from a supplier reduces the amount owed by a customer?

• credit note

• debit note

• invoice

• statement of account

Credit notes issued by X are listed in which book of prime entry?

• purchases Day Book / journal

• purchases returns Day Book journal

• sales Day Book / journal

• sales returns Day Book / journal