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This is a Credit Sales, Business Documents and Bookkeeping Question - Junior Cycle Business Studies - Question 2 - 2014
Question 2
This is a Credit Sales, Business Documents and Bookkeeping Question. Answer all parts of this question: The following Quotation was received by Anne O’Connor, Purc... show full transcript
Worked Solution & Example Answer:This is a Credit Sales, Business Documents and Bookkeeping Question - Junior Cycle Business Studies - Question 2 - 2014
Step 1
Explain any three of the following terms mentioned in the above quotation: trade discount, cash on delivery, catalogue, bank draft.
Answer
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Trade Discount: This is a reduction in the price of goods or services provided by the seller to the buyer. It encourages bulk purchases and incentivizes customers to make larger orders, ultimately benefiting both the seller and the buyer.
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Cash on Delivery: This payment method requires the buyer to pay for goods at the time of delivery. This approach decreases the seller's risk of non-payment and ensures cash flow at the point of sale.
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Bank Draft: A bank draft is a secure method of payment issued by a bank, guaranteeing the seller that the funds are available. It is commonly used in transactions where safety and assurance of payment are paramount.
Step 2
State two means by which a business can make an enquiry about goods or services.
Answer
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Letter: A formal written communication to inquire about products or services can provide detailed information and context about the request.
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Calling personally to the seller: This direct approach allows for immediate feedback and clarification of any questions related to the goods or services.
Step 3
What procedures, other than checking the name and address of the seller, should OCSPORTSWARE Ltd use when processing incoming quotations?
Answer
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Check the Quotation Against the Enquiry: Ensure that the quotation meets the specifications outlined in the initial enquiry, confirming that all required products and terms are accurately represented.
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Compare with Other Quotations: Evaluate different quotations available from various sellers to determine the best value for money and ensure competitive pricing.
Step 4
Step 5
Will OCSPORTSWARE Ltd have to pay for delivery? Tick the correct box and explain your answer on the sheet supplied with this paper.
Answer
Yes: OCSPORTSWARE Ltd purchased over €10,000 worth of goods (as per quotation). Therefore, they are exempt from delivery charges based on the terms set in the quotation.