Photo AI
This is a Credit Purchases, Business Documents and Bookkeeping Question - Junior Cycle Business Studies - Question 2 - 2015
Question 2
This is a Credit Purchases, Business Documents and Bookkeeping Question. Answer all parts of this question: (A) (i) Quotations, Orders, Letters of Complaint and Cr... show full transcript
Worked Solution & Example Answer:This is a Credit Purchases, Business Documents and Bookkeeping Question - Junior Cycle Business Studies - Question 2 - 2015
Step 1
Name two other documents used by businesses when purchasing and selling goods.
Answer
Two other documents used by businesses when purchasing and selling goods are:
- Invoice: A document detailing a transaction between a buyer and a seller, listing goods/services provided with their prices.
- Statement: A summary of all transactions between a buyer and seller over a specific period, often used for payment tracking.
Step 2
Explain two reasons why businesses might give their customers cash discounts.
Answer
-
To encourage payment before the due or agreed date: Cash discounts incentivize customers to pay their bills earlier than the standard terms, improving the seller's cash flow.
-
To attract new customers/increase sales: Offering cash discounts can entice new customers who may compare prices elsewhere, and it can help maintain loyalty among existing customers by encouraging repeat purchases.
Step 3
Complete the Order Form No. 11 on the sheet supplied with this paper.
Answer
GB Ltd, Western Way, Tralee, Co. Kerry
Order No. 11
CP Ltd Green Field Road Cavan Co. Cavan
Date: 22/05/2015 Quotation No. 31
| QUANTITY | DESCRIPTION | PRICE EACH | ||
|---|---|---|---|---|
| 100 | Pairs of Boots | £55 | ||
| 200 | Sun Hats | £12 | ||
| 200 | Plastic Mats | £20 |
Goods to be delivered to the above address within 10 days
Signature: Gertrude Brooks Position: Purchasing Manager
Step 4
What two procedures would you recommend GB Ltd use when processing outgoing orders?
Answer
-
File a copy of the order/file electronically: This ensures that there is a digital record of the transaction for future reference and can help streamline order processing.
-
Check that the name and address of the seller is correct: Ensuring accuracy in the order details prevents potential delays or errors in the order fulfillment process.
Step 5
Complete the Credit Note No. 22 on 9 June 2015 on the sheet supplied with this paper.
Answer
CP Ltd, Green Field Road, Cavan, Co. Cavan
CREDIT NOTE No. 22
Telephone: 049 9132131 VAT Reg. No. IE 2356731
GB Ltd, Western Way, Tralee, Co. Kerry
Date: 09/06/2015 Your Order No: 11
| QUANTITY | DESCRIPTION | PRICE EACH | TOTAL |
|---|---|---|---|
| 50 | Plastic Mats | £20 | £1,000 |
Reason: torn (1)
- Total (excluding VAT): £1,000
- Trade Discount: £300
- Subtotal: £700
- VAT: £161
- Total (Including VAT): £861
Step 6