Documents used in Internal trade
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Some of the goods sent to buyer were found damaged. But he is willing to accept damaged goods at less than invoice price. He should sendMarks:1
Credit note refers to a document developed and sent by one party (either buyer or seller) to the other. Its purpose is opposite to that of a debit note.
The document enables the buyer to compare entries in his purchase ledger with the statement isMarks:1
statement of account.
Statement of account refers to a statement sent by a seller at periodical intervals to the buyers. It depicts the summary of transactions that took place during the period.
When is trade discount given by a supplier?Marks:2
Trade discount is given by the supplier in the following cases:
- On purchase of large quantity of goods
- As per the common trade practices followed by suppliers
Distinguish between debit and credit note.Marks:2
It is sent when the other party’s account is to be debited.
It is sent when the other party’s account is to be credited.
It is an additional invoice
It is not like an additional invoice
When is a Proforma invoice issued by a seller?Marks:3
A proforma invoice is issued in following cases:
- When goods are sent on approval basis
- When goods are sent to the consignee for sale
- When the supplier receives the payment in advance i.e. before dispatch of goods
- When goods are sent across borders of a country (i.e. in foreign trade, sent to custom authorities to provide help in calculation of customs duty)