Documents
_____ is given for cash payment to show evidence of payment.
Receipt
When a customer decides to place an order with a supplier, he/she may place the order in writing in a letter or by using an _____ _____.
Order Form
A written order directing a bank to pay money as instructed.
A cheque (check)
A document sent from a bank or financial institute guarantees that a seller will receive a buyer's payment on time and for the full amount.
Letter of Credit
This account is better for storing money and earning interest.
Savings Account
This bill is sent by the supplier to the purchaser immediately after goods have been dispatched.
Invoice
The manufacturer, on receiving the letter of inquiry from a potential customer, would forward the catalog and price list requested, together with a _______ ______.
Covering Letter
A seller may require a _____ ______ when they have no relationship with the buyer.
Bank Draft
Who has the advantage when paying with trade credit?
The Buyer
How many withdrawals does a checking account have?
Unlimited
An invoice is sent to a buyer when payment is required by the seller in advance.
Proforma Invoice
At the end of the accounting period, the accounting department would send a _______ showing the total indebtedness, or amount owing.
Statement
A written order used primarily in international trade binds one party to pay a fixed sum of money to another party on demand or at a predetermined date.
Bill of Exchange
The following are all what? - Cheque, Bank Draft, Documentary Credit, Trade Credit, Bill of Exchange, Letter of Credit
Methods of Payment
____ deposits are those with a fixed time and usually pay a fixed interest rate
Time Deposits
A businessman writes a _______ of ________, requesting information about the type and class of goods required and asking for a quotation or price list.
Letter of Inquiry
It is used to add amounts to the original invoice.
Debit Note
Very similar to a letter of credit, and facilitates international payment transactions.
Documentary Credit
A business-to-business (B2B) agreement in which a customer can purchase goods on an account without paying cash upfront, paying the supplier at a later scheduled date.
Trade Credit
This type of loan gives the person the ability to draw funds greater than are available in the company's current account.
Overdraft Loan
A reduction in the catalog price of an article, given by the manufacturer or the wholesaler to the retailer, to enable him to make a profit.
Trade Discount
If the supplier makes a mistake, it will send a _____ _____ to correct their error.
Credit Note
What is the first step in the process of paying with a letter of credit?
The Importer applies to their bank for a letter of credit
Banks collect a fee for issuing which two methods of payment?
Letter of Credit and Bank Draft
This cheque has a crossed line on it to prevent being paid over the counter. It can only be paid into the bank account.
Crossed cheques