Documents used in Internal trade

There is no content available!

To Access the full content, Please Purchase

  • Q1

    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 send

    Marks:1
    Answer:

    credit note.

    Explanation:

    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.

    View Answer
  • Q2

    The document enables the buyer to compare entries in his purchase ledger with the statement is

    Marks:1
    Answer:

    statement of account.

    Explanation:

    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.

    View Answer
  • Q3

    When is trade discount given by a supplier?

    Marks:2
    Answer:

    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

    View Answer
  • Q4

    Distinguish between debit and credit note.

    Marks:2
    Answer:

    Basis

    Debit note

    Credit note

    Sent

    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.

    Nature

    It is an additional invoice

    It is not like an additional invoice

    View Answer
  • Q5

    When is a Proforma invoice issued by a seller?

    Marks:3
    Answer:

    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)

    View Answer