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A written order directing a bank to pay money as instructed.
A Cheque (check)
A document sent from a bank or financial institute that guarantees that a seller will receive a buyer's payment on time and for the full amount.
Letter of credit
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 account without paying cash up front, paying the supplier at a later scheduled date.
A Trade credit
A written order used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date.
A Bill of exchange
A seller may require a _____ ______ when they have no relationship with the buyer.
bank draft
A business man ordering goods for the first time from a wholesaler or manufacturer, would write a _______ of ________, requesting information about the type and class of goods required and asking for a quotation or price list.
Letter of enquiry
The manufacturer, on receiving the letter of enquiry from a potential customer, would forward the catalogue and price list requested, together with a ______ ______.
Covering Letter
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 his/her firm’s own _____ _____.
order forms
A bill sent by the supplier to the purchaser immediately after the goods have been dispatched. It contains all details of the purchase: quantity, type, grade, price.
Invoice
an invoice sent to a buyer when payment is required by the seller in advance.
Proforma invoice
At the end of the account period the account department would send a _______ showing the total indebtedness, or amount owing.
Statement
a reduction in the catalogue price of an article, given by the manufacturer or the wholesaler to the retailer, to enable him to make a profit.
Trade discount
given for cash payment, but is not required if payment has been made by cheque or bank draft, as these furnish evidence of payment.
Receipt
The following are all what?
cheque, bank draft, documentary credit, trade credit, bill of exchange, letter of credit.
Methods of payment
It is used to add amounts to the original invoice, eg. An undercharge or omission. Example. The seller may have sent too many items to the buyer and the buyer keeps the extra items but does not pay for them.
Debit Note
the supplier’s typist typed the total as $8600 instead of $8400- or some damage was done to the goods in transit, for which the manufacturer has agreed to accept responsibility. He will then send the customer a ______ ______ to correct his error.
credit note