INTRODUCTION
A business document provides information and is an official record of a
transaction for both the buyer and the seller.
In a cash transaction goods/services are paid for by cash, cheque or debit
card immediately they are received. A credit transaction is one in which
the goods/services change hands but payment is made at a later date.
A cash transaction is straightforward and needs little documentation:
• cash sales may be recorded from the till roll;
• cash purchases may be recorded from receipts, cheque counterfoils
or debit card receipts.
A credit transaction requires more documentation:
• credit sales are recorded from copies of invoices sent to buyers;
payments received are written up from cheques received from
customers or from direct debit and credit transfer documents;
• credit purchases are recorded from invoices sent by suppliers;
payments made are written up from the counterfoils of cheques sent
or from direct debit and credit transfer receipts.
All business documents are used as records but only a few are used by
the accounts department.
Documents
A firm interested in finding a source of goods or services would
investigate the possibilities. When possible sources are found, an
Inquiry may be sent to each one asking for details of quality, prices and
delivery times. In response to this inquiry a Catalogue, Price list or
Quotation might be sent, showing the information required.
These are studied and compared and a supplier is selected. This
selection may be on the basis of the lowest price but quality of goods/
services, reliability in delivery and follow-up service are extremely
important. The buyer can now place an order with the selected
supplier.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
1
INTRODUCTION
Customer’s documentation
Inquiry sent
Quotation/price list received
Order placed
Goods received along with despatch/advice note
Invoice received
If payment made now
If payment not made
Cheque written
Statement received
Cheque written
2
BUSINESS DOCUMENTS (INT 1, INT 2, H)
INTRODUCTION
Order
An order is sent by the buyer to the supplier and shows the following
information:
•
•
•
•
name and address of both the buyer and supplier
date
order number
details of goods required – catalogue number, description, quantity
and unit price
• signature of the person authorised to make the purchase
• any special delivery instructions.
One order form is sent to the supplier; the buyer may need several
copies of the order for various departments.
Example
GLENTRESS GARDENS
Lakeside Road
GLENTRESS
GS4 6YB
Tel: 01643 845128
ORDER
To:
Terracotta Supplies
Braehead Road
GLASGOW
G78 3ND
Order no: 4176
Date: 07.02.04
Please supply the following:
Cat No
Quantity
Description
T246
T247
T248
T1398
50
80
50
100
Oak leaf, large
Oak leaf, medium
Oak leaf, small
Special offer: set of 4 pots
Signature
K L Dawson
BUYER
Unit price
£
10.00
7.50
4.80
15.00
BUSINESS DOCUMENTS (INT 1, INT 2, H)
3
4
BUSINESS DOCUMENTS (INT 1, INT 2, H)
CALCULATION OF VAT
SECTION 1
Calculation of VAT
VAT is a tax (currently at the rate of 17.5%) that must be added to the
value of most goods and services. In many instances VAT will be 17.5%
of cost price of the goods, the amount being added at the point of sale.
Note that when VAT is calculated to more than 2 decimal places the
amount is rounded down, e.g. £6.948 is shown as £6.94.
Examples
•
•
•
Cost price
VAT (17.5%)
Total cost
£100
£500
£1,000
£17.50
£87.50
£175.00
£117.50
£587.50
£1,175.00
Task 1
Copy and complete the following table to show the VAT and total cost
payable.
Cost price
VAT (17.5%)
Total cost
1. £800
2. £960
3. £2,400
4. £3,800
5. £4,260
6. £5,320
BUSINESS DOCUMENTS (INT 1, INT 2, H)
5
CALCULATION OF VAT
VAT when cost includes trade discount
Customers who buy in bulk are often allowed to buy at a lower price –
they are allowed trade discount. Trade discount is deducted from the
original cost of the goods and gives a lower net cost. VAT is calculated
on this lower figure.
Examples
•
•
•
Cost
Trade discount
%
Net cost
VAT
17.5%
Total cost
£400
£840
£1,400
20%
25%
20%
£320
£630
£1,120
£56
£110.25
£196
£376
£740.25
£1,316
£80
£210
£280
Task 2
Copy and complete the following table to show the VAT and total cost.
Cost
Trade discount
%
Net cost
1. £600
20%
£120
£480
2. £1,500
15%
£225
3. £3,200
10%
4. £5,480
20%
5. £8,264
25%
6. £10,000
20%
6
BUSINESS DOCUMENTS (INT 1, INT 2, H)
VAT
17.5%
Total cost
CALCULATION OF VAT
VAT when cash discount is allowable
Terms of payment may include cash discount. This is a deduction
allowed to customers who pay promptly (usually within a stated time,
e.g. 10 days). VAT is calculated on the lowest possible price. If cash
discount terms are shown on the invoice, VAT is calculated on cost less
cash discount. However, the final invoice figure is net cost + VAT.
Total cost = Cost price – trade discount + VAT
(The customer only receives cash discount if the invoice is paid on
time.)
Examples
Cost
Trade discount Cash discount
%
Lowest
price
VAT
17.5%
•
•
£10,000
£10,000
0
10%
•
•
£24,000
£24,000
0
20%
•
•
£32,000
£32,000
0
15%
£1,000
2.5%
2.5%
£250
£2251
£9,750
£8,775
£1,706.25
£1,535.62
£4,800
5%
5%
£1,200
£9602
£22,800
£18,240
£3,990
£3,192
£4,800
4%
4%
£1,280
£1,0883
£30,720
£26,112
£5,376
£4,569.60
2.5% × (£10,000 – £1,000)
2.5% × (£24,000 – £4,800)
3
4% × (£32,000 – £4,800)
1
2
BUSINESS DOCUMENTS (INT 1, INT 2, H)
7
20.0
10.0
12.5
12.0
54,800
84,000
77,000
0.0
545
25,000
0.0
240
25.0
0.0
1,600
15.0
0.0
4,000
8,420
0.0
2,000
12,400
%
0.0
£
600
£
1,860.00
2,105.00
0.00
0.00
5.0
2.5
5.0
2.5
4.0
2.0
2.5
2.0
4.0
4.0
5.0
2.5
%
£
421.60
126.30
100.00
15.00
Cash discount
6,188.70
585.00
£
Lowest price VAT
%
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
£
1,083.02
102.38
VAT
BUSINESS DOCUMENTS (INT 1, INT 2, H)
Trade discount
Complete the following table to show the amount of VAT chargeable and invoice total.
8
Cost
Task 3
7,398.02 (ie£8,420-£2,105+£1,083.02)
702.38 (ie £600+£102.37)
£
Invoice total
CALCULATION OF VAT
CALCULATION OF VAT
Answer to Task 1
Cost price
VAT (17.5%)
Total cost
1. £800
£140
£940
2. £960
£168
£1,128
3. £2,400
£420
£2,820
4. £3,800
£665
£4,465
5. £4,260
£745.50
£5,005.50
6. £5,320
£931
£6,251
Answer to Task 2
Cost
Trade discount
%
Net cost
VAT
17.5%
Total cost
1. £600
20%
£120
£480
£84
£564
2. £1,500
15%
£225
£1,275
£223.12
£1,498.12
3. £3,200
10%
£320
£2,880
£504
£3,384
4. £5,480
20%
£1,096
£4,384
£767.20
£5,151.20
5. £8,264
25%
£2,066
£6,198
£1,084.65
£7,282.65
6. £10,000
20%
£2,000
£8,000
£1,400
£9,400
BUSINESS DOCUMENTS (INT 1, INT 2, H)
9
20.0
10.0
12.5
12.0
54,800
84,000
77,000
0.0
545
25,000
0.0
240
25.0
0.0
1,600
15.0
0.0
4,000
8,420
0.0
2,000
12,400
%
0.0
£
600
£
9,240.00
10,500.00
5,480.00
5,000.00
1,860.00
2,105.00
0.00
0.00
0.00
0.00
0.00
0.00
5.0
2.5
5.0
2.5
4.0
2.0
2.5
2.0
4.0
4.0
5.0
2.5
%
£
3,388.00
1,837.50
2,466.00
500.00
421.60
126.30
13.63
4.80
64.00
160.00
100.00
15.00
Cash discount
64,372.00
71,662.50
46,854.00
19,500.00
10,118.40
6,188.70
531.38
235.20
1,536.00
3,840.00
1,900.00
585.00
£
%
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
17.5
Lowest price VAT
£
92.99
41.16
268.80
672.00
332.50
102.38
11,265.10
12,540.93
8,199.45
3,412.50
1,770.72
1,083.02
VAT
BUSINESS DOCUMENTS (INT 1, INT 2, H)
Trade discount
Complete the following table to show the amount of VAT chargeable and invoice total.
10
Cost
Answer to Task 3
79,025.10
86,040.93
57,519.45
23,412.50
12,310.72
7,398.02 (£8,420-£2,105+£1,083.02)
637.99
281.16
1,868.80
4,672.00
2,332.50
702.38 (£600+£102.37)
£
Invoice total
CALCULATION OF VAT
EXAMPLES
SECTION 2
Invoice
When the order is received the goods, if available, are packed for
delivery to the customer. Full details are recorded on an Invoice. Part
of the invoice may be copied and forwarded as an Advice note or
included with the parcel(s) as a Delivery note.
The invoice is sent to the customer when the goods are despatched and
shows the following details:
•
•
•
•
•
•
•
•
•
•
names and addresses of supplier and buyer
order number and invoice number
date
details of goods – quantity, catalogue number and description
unit price and total price for the quantity
total price before any deductions/additions
trade discount deducted, if any
VAT added, if any
total amount due from customer
terms applicable, e.g. cash discount for payment within a stated time.
The advice and delivery notes show the first four items but all prices are
excluded.
The invoice is sent to the customer and several copies are retained by
the supplier, e.g. one copy each to sales, despatch, stock and accounts
departments.
The customer is usually required to pay the amount due on receipt of
the invoice or within the time stated on the invoice, e.g. one month.
Late payment may result in the loss of cash discounts.
Two discounts may appear on an invoice – trade discount and cash
discount.
Trade discount is usually allowed between traders in the same line or
for buying in bulk. It is expressed as a percentage and the amount
shown after deduction is the net purchase price. For example, goods
sold for £800 less 20% trade discount would cost the buyer only £640
(£800–£160).
BUSINESS DOCUMENTS (INT 1, INT 2, H)
11
EXAMPLES
Cash discount is offered to encourage customers to pay promptly. For
example, terms may show a discount of 5% for payment within 10 days.
A customer settling an account within that time can deduct 5% from the
amount due. The customer owing £640 need only pay £608 (£640–£32)
if the account is paid within 10 days.
VAT (Value added tax) is a government tax on most goods and services
and the current rate is 17.5%. It is calculated on the lowest possible
price. The calculation may be based on
•
•
•
•
12
cost
cost
cost
cost
price
price less trade discount
price less cash discount
price less trade and cash discounts.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXAMPLES
Example (Invoice with no discounts)
INVOICE
TERRACOTTA SUPPLIES
Braehead Road
GLASGOW
G74 3ND
Glentress Gardens
Lakeside Road
GLENTRESS
GS4 6YB
Order no: 4176
Invoice no: 5930
Date: 10.02.04
Quantity
Cat No
Description
Unit price
£
Total price
£
50
80
50
100
T246
T247
T248
T1398
Oak leaf, large
Oak leaf, medium
Oak leaf, small
Special offer: set of 4 pots
10.00
7.50
4.80
15.00
500.00
600.00
240.00
1,500.00
2,840.00
Add VAT @ 17.5%
AMOUNT DUE
497.00
3,337.00
Terms:
Delivery: Rail
NOTE:
VAT is calculated on cost.
£2,840 × 17.5% = £497
BUSINESS DOCUMENTS (INT 1, INT 2, H)
13
EXAMPLES
Example (Invoice with trade discount only)
INVOICE
TERRACOTTA SUPPLIES
Braehead Road
GLASGOW
G74 3ND
Glentress Gardens
Lakeside Road
GLENTRESS
GS4 6YB
Order no: 4176
Invoice no: 5930
Date: 10.02.04
Quantity
Cat No
Description
Unit price
£
Total price
£
50
80
50
100
T246
T247
T248
T1398
Oak leaf, large
Oak leaf, medium
Oak leaf, small
Special offer: set of 4 pots
10.00
7.50
4.80
15.00
500.00
600.00
240.00
1,500.00
2,840.00
Less 20% trade discount
568.00
2,272.00
Add VAT @ 17.5%
AMOUNT DUE
Terms:
Delivery: Rail
NOTE:
VAT is calculated on cost less trade discount.
Cost price
Less 20% trade discount
Net cost
VAT
14
£2,840.00
568.00
£2,272.00
£2,272 × 17.5% = £397.60
BUSINESS DOCUMENTS (INT 1, INT 2, H)
397.60
2,669.60
EXAMPLES
Example (Invoice with cash discount only)
INVOICE
TERRACOTTA SUPPLIES
Braehead Road
GLASGOW
G74 3ND
Glentress Gardens
Lakeside Road
GLENTRESS
GS4 6YB
Order no: 4176
Invoice no: 5930
Date: 10.02.04
Quantity
Cat No
Description
Unit price
£
Total price
£
50
80
50
100
T246
T247
T248
T1398
Oak leaf, large
Oak leaf, medium
Oak leaf, small
Special offer: set of 4 pots
10.00
7.50
4.80
15.00
500.00
600.00
240.00
1,500.00
2,840.00
Add VAT @ 17.5%
AMOUNT DUE
472.15
3,312.15
Terms: 5% within 10 days
Delivery: Rail
NOTE:
VAT is calculated on cost less cash discount, but added to net cost of
goods.
Cost
5% cash discount
Cost less discount
VAT @ 17.5%
£2,840
142
£2,698
£2,698 × 17.5% = £472.15
BUSINESS DOCUMENTS (INT 1, INT 2, H)
15
EXAMPLES
Example (Invoice with trade and cash discounts)
INVOICE
TERRACOTTA SUPPLIES
Braehead Road
GLASGOW
G74 3ND
Glentress Gardens
Lakeside Road
GLENTRESS
GS4 6YB
Order no: 4176
Invoice no: 5930
Date: 10.02.04
Quantity
Cat No
Description
Unit price
£
Total price
£
50
80
50
100
T246
T247
T248
T1398
Oak leaf, large
Oak leaf, medium
Oak leaf, small
Special offer: set of 4 pots
10.00
7.50
4.80
15.00
500.00
600.00
240.00
1,500.00
2,840.00
Less 20% trade discount
568.00
2,272.00
Add VAT @ 17.5%
AMOUNT DUE
Terms: 5% within 1 week
Delivery: Rail
16
BUSINESS DOCUMENTS (INT 1, INT 2, H)
377.72
2,649.72
EXAMPLES
NOTE:
VAT is calculated on the lowest possible cost, i.e. cost less trade discount
less cash discount.
Cost price
Less 20% trade discount
Net cost
Less 5% cash discount
Lowest cost
VAT
£2,840.00
568.00
£2,272.00
113.60
£2,158.40
£2,158.40 × 17.5% = £377.72
BUSINESS DOCUMENTS (INT 1, INT 2, H)
17
EXAMPLES
Credit note
Sometimes goods bought have to be returned, for example if they are
faulty, damaged in transit or not exactly as ordered. The amount due
from the customer will have to be reduced by the value of the returned
goods. The document used to show this is a Credit note. A credit note
is also be used to correct an overcharge. The credit note is made out by
the seller and sent to the buyer. A copy is kept for the accounts
department.
The information given in a credit note is the same as in the invoice but it
shows the reason for the credit. It is called a credit note because it
results in a credit entry in the customer’s account.
Note: If goods sold at a trade discount are returned, the same amount
of trade discount must be deducted on the credit note and the net value
entered in the accounts. When trade and cash discounts are shown on
the invoice, the same method of calculation of VAT is used on the credit
note.
18
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXAMPLES
Example
CREDIT NOTE
TERRACOTTA SUPPLIES
Braehead Road
GLASGOW
G74 3ND
Glentress Gardens
Lakeside Road
GLENTRESS
GS4 6YB
Credit Note no: 48
Invoice no: 5930
Date: 16.02.04
Quantity
Cat No
Description
Unit price
£
20
T1398
Special offer: set of 4 pots
Faulty
15.00
Total price
£
300.00
Add VAT @ 17.5%
52.50
CREDIT AMOUNT
352.50
A Debit note is sent by the seller to the buyer to correct an
undercharge. It is similar to a credit note in layout but shows details of
the undercharge. This is used to correct the entries in the customer’s
account.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
19
EXAMPLES
Statement of account
A statement of account is used when customers do not settle their debts
on receipt of invoice. The statement summarises all transactions that
have taken place since the previous statement. It is a copy of the
customer’s account in the ledger and notifies the customer that
payment is due. The seller sends the statement to the customer and
passes one copy to its own accounts department.
Example
STATEMENT OF ACCOUNT
TERRACOTTA SUPPLIES
Braehead Road
GLASGOW
G74 3ND
Glentress Gardens
Lakeside Road
GLENTRESS
GS4 6YB
Date: 28.02.04
Date
Details
Debit
£
2004
Feb 10
Feb 16
Invoice 5930
Credit 48
3,237.00
Credit
£
Balance
£
352.50
3,237.00
2,884.50
The last amount shown in the balance column is the amount owing.
Terms: net cash within one month.
20
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXAMPLES
Example (showing opening balance)
STATEMENT OF ACCOUNT
ULLAPOOL TWEEDS
North Road
ULLAPOOL
Date: 30 January 2004
Classic Clothing plc
Perth Road
CRIEFF
PH42 6YH
Date
2004
Jan 1
Jan 5
Jan 8
Jan 15
Jan 23
Jan 28
Details
Brought forward
Invoice 3468
Invoice 3752
Credit note 426
Cheque 002451
Discount allowed
Invoice 4010
Debit
£
Credit
£
1,240.00
983.50
220.00
780.00
40.00
2,460.00
Balance
£
820.00
2,060.00
3,043.50
2,823.50
2,043.50
2,003.50
4,463.50
The last amount shown in the balance column is the amount due on 28
February.
Explanation
Date
Transaction
Effect on balance
Jan
Jan
Jan
Jan
Amount owing from previous transactions
Credit sales to Classic Clothing plc
Goods returned by Classic Clothing plc
Cheque sent by Classic Clothing plc
Discount allowed to Classic Clothing plc
(for settling the opening balance within
the stated time)
Credit sales to Classic Clothing plc
Debit balance
Increase
Decrease
Decrease
Decrease
1
5,8
15
23
Jan 28
Increase
BUSINESS DOCUMENTS (INT 1, INT 2, H)
21
EXAMPLES
Cheques
A cheque is an order to a bank to pay out the sum of money shown on
the cheque to the person named on the cheque. This is a safe form of
payment. Crossed cheques must be paid into a bank account and cannot
be cashed across the counter. Cheque books are issued by the bank (the
drawee) and contain the following:
• name of bank, the branch address and the sort code
• account name and number
• cheque number – cheques are numbered consecutively through the
book.
The person writing the cheque (the drawer) must fill in the following
details:
•
•
•
•
date
name of person to whom the money is to be paid (the payee)
the amount in words and in figures
authorised signature.
Cheque counterfoils may be completed or pages at the back of the book
may be used to keep a record of payments made. These provide the
information for accounting records.
Example
80-04-65
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Pay
£
004560
22
004560
80-04-65
BUSINESS DOCUMENTS (INT 1, INT 2, H)
0014356
EXAMPLES
80-04-65
30 March 2004
Terracotta Supplies
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Pay
£2,884.50
30 March 2004
Terracotta Supplies
Two thousand eight hundred and
eighty four pounds 50
£2,884.50
ML Dawson
004560
Counterfoil
004560
80-04-65
0014356
Cheque
BUSINESS DOCUMENTS (INT 1, INT 2, H)
23
EXAMPLES
Receipts for cash payments
A receipt is a document confirming that cash has been received. A
receipt is not necessary when payment is made by cheque because the
bank statement issued by the bank lists all cheques paid out from the
account. There are different types of receipt and a few are listed below:
• a statement stamped and signed by the recipient and returned to the
customer;
• a receipt form showing date, amount received, name of payer and
signature of the recipient of the cash;
• the appropriate part of the till roll torn off and handed to the
customer.
Credit/debit card receipt
Credit and debit cards are often used in place of cash or cheques and
are regarded as safe methods of payment.
Payment by debit card means that the amount is immediately
electronically transferred (switched) from the customer’s bank account
to the account of the supplier.
Payment by credit card defers payment until a later date. The bill is sent
to the credit card company, e.g. Visa, Barclaycard and payment need not
be made until the credit card statement is received.
The receipt shows how payment has been made. If a credit or debit card
has been used the card number (or part of it) is shown.
Pay-in slip
When money is deposited in the bank it must be accompanied by a payin slip. The pay-in slip shows the date, name and number of the account
and the amount paid in. These details are entered in the counterfoil
which can then be used when writing up the accounts.
24
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXAMPLES
Till Roll Receipt (cash)
Till Roll Receipt (debit card)
PERTHSHIRE FOODS
Crieff
PERTHSHIRE FOODS
Crieff
VAT No: 426 3108 04
Date: 2 March 2004
Time: 1230 hrs
VAT No: 426 3108 04
Date: 2 March 2004
Time: 1230 hrs
425679
Cream of Tomato
20 @ £2.50
419834
Cream of Chicken
20 @ £2.60
365412
Tartare Sauce
30 @ £1.20
365420
Hollandaise Sauce
20 @ £1.15
425679
Cream of Tomato
20 @ £2.50
419834
Cream of Chicken
20 @ £2.60
365412
Tartare Sauce
30 @ £1.20
365420
Hollandaise Sauce
20 @ £1.15
Items: 4
Total
50.00
52.00
36.00
23.00
161.00
Paid by cash
Items: 4
Total
50.00
52.00
36.00
23.00
161.00
Paid by Switch************6807
Authorisation Code
2164
You were served by: Pauline
CARDHOLDER PLEASE RETAIN FOR
YOUR RECORD
You were served by: Pauline
Pay-in counterfoil
Date: 14 March 2004
Account: J Robinson Co
135682
Amount: £540.00
Paid in by: M Robinson
BUSINESS DOCUMENTS (INT 1, INT 2, H)
25
26
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXERCISES
SECTION 3
Exercise 1a
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
Total price
£
3,162.35
Add VAT @ 17.5%
AMOUNT DUE
Terms:
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above.
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
27
EXERCISES
Exercise 1b
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
Total price
£
3,162.35
Less 25% trade discount
Net cost
Add VAT @ 17.5%
AMOUNT DUE
Terms:
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above.
•
•
•
•
28
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXERCISES
Exercise 1c
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
Total price
£
3,162.35
Add VAT @ 17.5%
AMOUNT DUE
Terms: 5% within 10 days
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above. (Remember to check the terms shown at the end of
invoice.)
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
29
EXERCISES
Exercise 1d
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
Total price
£
3,162.35
Less 25% trade discount
Net cost
Add VAT @ 17.5%
AMOUNT DUE
Terms: 5% within 10 days
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above.
•
•
•
•
30
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXERCISES
Exercise 2a
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
VAT @ 17.5%
AMOUNT DUE
Terms:
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
• total cost
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
31
EXERCISES
Exercise 2b
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
Less 10% trade discount
Net cost
VAT @ 17.5%
AMOUNT DUE
Terms:
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
•
•
•
•
•
32
total cost
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXERCISES
Exercise 2c
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
VAT @ 17.5%
AMOUNT DUE
Terms: 2.5% within 1 month
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
• total cost
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
33
EXERCISES
Exercise 2d
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
Less 10% trade discount
Net cost
VAT @ 17.5%
AMOUNT DUE
Terms: 2.5% within 1 month
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
•
•
•
•
•
34
total cost
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXERCISES
Exercise 3
STATEMENT OF ACCOUNT
MARCHMONT COMPONENTS PLC
24 Crail Road
KIRKCALDY
KY3 7UL
Fife Engineering Ltd
Harbour Street
ANSTRUTHER
Date
2004
March 1
5
12
16
21
Details
Brought forward
Invoice 236
Invoice 468
Credit note 132
Cheque 3480
Discount allowed
Date: 30 March 2004
Debit
Credit
560.00
285.60
65.10
225.00
10.50
Balance
235.50
795.50
1,081.10
1,016.00
The last figure in the balance column is the amount due on 30 April.
You are required to complete the statement by calculating and inserting
the balances on 21 March.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
35
EXERCISES
Exercise 4
STATEMENT OF ACCOUNT
MARCHMONT COMPONENTS PLC
24 Crail Road
KIRKCALDY
KY3 7UL
Macduff Boatyard
Harbour Street
MACDUFF
Date
Details
2004
March 1
6
9
18
20
28
Brought forward
Invoice 242
Cheque 14682
Discount allowed
Invoice 683
Credit note 138
Date: 30 March 2004
Debit
Credit
Balance
1,450.85
2,600.00
1,325.00
125.85
3,420.00
328.00
The last figure in the balance column is the amount due on 30 April.
You are required to complete the statement by calculating and inserting
the necessary figures in the balance column.
36
BUSINESS DOCUMENTS (INT 1, INT 2, H)
EXERCISES
Exercise 5
STATEMENT OF ACCOUNT
MARCHMONT COMPONENTS PLC
24 Crail Road
KIRKCALDY
KY3 7UL
Inverythan Marina
Inverythan
ABERDEEN
AB25 7SH
Date
Details
2004
March 1
6
10
15
20
20
Brought forward
Invoice 3864
Invoice 4026
Credit note 145
Cheque 24632
Discount allowed
Date: 30 March 2004
Debit
Credit
Balance
760.00
The last figure in the balance column is the amount due on 30 April.
You are required to enter the following amounts in the appropriate
columns in the statement above; update the balance after each entry.
March
March
March
March
6
10
15
20
March 24
Invoice 3864
Invoice 4026
Credit note 145
Cheque 24632
Discount allowed
Invoice 4152
£1,250.00
£2,525.60
£324.80
£725.00
£35.00
£468.10
BUSINESS DOCUMENTS (INT 1, INT 2, H)
37
EXERCISES
Exercise 6
You are employed by D R Mutch and have been asked to prepare and
sign three cheques to settle the debts listed below. Use today’s date.
• £125.60 to S J Kendall
• £1,240.80 to The Lochleven Catering Co
• £45 to Desktop Supplies
80-04-65
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Pay
£
004560
004560
80-04-65
0014356
80-04-65
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Pay
£
004561
38
004561
80-04-65
BUSINESS DOCUMENTS (INT 1, INT 2, H)
0014356
EXERCISES
80-04-65
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Pay
£
004562
004562
80-04-65
0014356
BUSINESS DOCUMENTS (INT 1, INT 2, H)
39
40
BUSINESS DOCUMENTS (INT 1, INT 2, H)
ANSWERS TO EXERCISES
SECTION 4
Exercise 1a
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
3,162.35
Add VAT @ 17.5%
AMOUNT DUE
Total price
£
553.41
3,715.76
Terms:
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above.
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
41
ANSWERS TO EXERCISES
Exercise 1b
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
Less 25% trade discount
Net cost
Add VAT @ 17.5%
AMOUNT DUE
Total price
£
3,162.35
790.59
2,371.76
415.05
2,786.81
Terms:
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above.
•
•
•
•
42
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
ANSWERS TO EXERCISES
Exercise 1c
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
3,162.35
Add VAT @ 17.5%
AMOUNT DUE
Total price
£
525.74
3,688.09
Terms: 5% within 10 days
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above.
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
43
ANSWERS TO EXERCISES
Exercise 1d
INVOICE
Yorkshire Leather plc
12 Ripon Road
WETHERBY
HE8 9US
To:
M&R Russell
64 Fife Street
ST ANDREWS
KY32 7MO
Date: 7 March 2004
Order no: 3471
Invoice no: 10455
Quantity
Cat No
Description
Unit price
£
18 prs
C345
50.30
905.40
18 prs
C498
52.00
936.00
12 prs
S530
58.20
698.40
10
C345
Leather shoes, navy, sizes
4–8
Leather shoes, cream, sizes
4–8
Leather shoes, mink, sizes
4–8
Bag, navy
36.00
360.00
5
BC498
Bag, cream
37.45
187.25
3
BS530B
Bag, mink
25.10
75.30
Total
Less 25% trade discount
Net cost
Add VAT @ 17.5%
AMOUNT DUE
Total price
£
3,162.35
790.59
2,371.76
394.30
2,766.06
Terms: 5% within 10 days
Delivery: Own transport
You are required to calculate the following figures and insert them in
the invoice above.
•
•
•
•
44
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
ANSWERS TO EXERCISES
Exercise 2a
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
VAT @ 17.5%
AMOUNT DUE
3,653.20
639.31
4,392.51
Terms:
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
• total cost
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
45
ANSWERS TO EXERCISES
Exercise 2b
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
Less 10% trade discount
Net cost
VAT @ 17.5%
AMOUNT DUE
3,653.20
365.32
3,287.88
575.37
3,863.25
Terms:
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
•
•
•
•
•
46
total cost
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
ANSWERS TO EXERCISES
Exercise 2c
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
VAT @ 17.5%
AMOUNT DUE
3,653.20
623.32
4,276.52
Terms: 2.5% within 1 month
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
• total cost
• VAT @ 17.5%
• amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
47
ANSWERS TO EXERCISES
Exercise 2d
INVOICE
Moorhouse Lighting
Broughton Road
Peebles
Solway Homes
Stranraer Road
DUMFRIES
DS2 3RT
Date: 10 March 2004
Order no: 14
Invoice no: 842
Ref no
Quantity
Details
Unit price
£
Total price
£
JK178
JK462
JM329
JM862
HL21
RL15
10
15
20
40
6
10
Table lamp and matching shade
Table lamp
Floor standing lamp
Table lamp with glass shade
Hobby lamp
Desk lamp
38.00
24.00
62.30
32.60
18.20
25.40
380.00
360.00
1,246.00
1,304.00
109.20
254.00
Total
Less 10% trade discount
Net cost
VAT @ 17.5%
AMOUNT DUE
3,653.20
365.32
3,287.88
560.99
3,848.87
Terms: 2.5% within 1 month
Delivery: Borders Transport
You are required to complete the invoice by calculating and inserting
the following figures.
•
•
•
•
•
48
total cost
trade discount
net cost
VAT @ 17.5%
amount due.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
ANSWERS TO EXERCISES
Exercise 3
STATEMENT OF ACCOUNT
MARCHMONT COMPONENTS PLC
24 Crail Road
KIRKCALDY
KY3 7UL
Fife Engineering Ltd
Harbour Street
ANSTRUTHER
Date
2004
March 1
5
12
16
21
Details
Brought forward
Invoice 236
Invoice 468
Credit note 132
Cheque 3480
Discount allowed
Date: 30 March 2004
Debit
Credit
560.00
285.60
65.10
225.00
10.50
Balance
235.50
795.50
1,081.10
1,016.00
791.00
780.50
The last figure in the balance column is the amount due on 30 April.
You are required to complete the statement by calculating and inserting
the balances on 21 March.
BUSINESS DOCUMENTS (INT 1, INT 2, H)
49
ANSWERS TO EXERCISES
Exercise 4
STATEMENT OF ACCOUNT
MARCHMONT COMPONENTS PLC
24 Crail Road
KIRKCALDY
KY3 7UL
Macduff Boatyard
Harbour Street
MACDUFF
Date
Details
2004
March 1
6
9
18
20
28
Brought forward
Invoice 242
Cheque 14682
Discount allowed
Invoice 683
Credit note 138
Date: 30 March 2004
Debit
Credit
Balance
1,325.00
125.85
1,450.85
4,050.85
2,725.85
2,600.00
6,020.00
5,692.00
2,600.00
3,420.00
328.00
The last figure in the balance column is the amount due on 30 April.
You are required to complete the statement by calculating and inserting
the necessary figures in the balance column.
50
BUSINESS DOCUMENTS (INT 1, INT 2, H)
ANSWERS TO EXERCISES
Exercise 5
STATEMENT OF ACCOUNT
MARCHMONT COMPONENTS PLC
24 Crail Road
KIRKCALDY
KY3 7UL
Inverythan Marina
Inverythan
ABERDEEN
AB25 7SH
Date
Details
2004
March 1
6
10
15
20
20
24
Brought forward
Invoice 3864
Invoice 4026
Credit note 145
Cheque 24632
Discount allowed
Invoice 4152
Date: 30 March 2004
Debit
Credit
1,250.00
2,525.60
324.80
725.00
35.00
468.10
Balance
760.00
2,010.00
4,535.60
4,210.80
3,485.80
3,450.80
3,918.90
The last figure in the balance column is the amount due on 30 April.
You are required to enter the following amounts in the appropriate
columns in the statement above; update the balance after each entry.
March
March
March
March
6
10
15
20
March 24
Invoice 3864
Invoice 4026
Credit note 145
Cheque 24632
Discount allowed
Invoice 4152
£1,250.00
£2,525.60
£324.80
£725.00
£35.00
£468.10
BUSINESS DOCUMENTS (INT 1, INT 2, H)
51
ANSWERS TO EXERCISES
Exercise 6
You are employed by D R Mutch and have been asked to prepare and
sign three cheques to settle the debts listed below. Use today’s date.
• £125.60 to S J Kendall
• £1,240.80 to The Lochleven Catering Co
• £45 to Desktop Supplies
80-04-65
Today’s date
S J Kendall
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Pay
£125.60
Today’s date
S J Kendall
One hundred and twenty five pounds 60
£125.60
Signature
004560
004560
80-04-65
0014356
80-04-65
Today’s date
The Lochleven
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Today’s date
Catering Co
Pay
£1,240.80
The Lochleven Catering Co
One thousand two hundred and forty
pounds 80
£1,240.80
Signature
004561
52
004561
80-04-65
BUSINESS DOCUMENTS (INT 1, INT 2, H)
0014356
ANSWERS TO EXERCISES
80-04-65
Today’s date
Desktop Supplies
DEESIDE BANK
147 Alford Road
BANCHORY
AB28 6HV
Pay
£45.00
Today’s date
Desktop Supplies
Forty five pounds only
£45.00
Signature
004562
004562
80-04-65
0014356
BUSINESS DOCUMENTS (INT 1, INT 2, H)
53