The types of financial transactions and documents Essay Example

rendered. This payment information must be recorded in a payroll, in compliance with legal regulations, to accurately calculate income tax and National Insurance contributions. To request a particular quantity of goods, a Purchase Order document (as shown in Example 1) is used by companies.

The purchase order is a useful tool for organizations to request a specific amount of goods, including information such as the business address, product quantity, and date. Whether it's businesses ordering supplies or consumers requesting items not currently available from a department store, this process can be used by all. In the following example, a customer from Sports Division/JJB Hayes utilized a purchase order to request a basketball set. As an internal transaction for the business, the consumer must pay ?149.99 which covers both the cost of the product and profit made by the company.

Example 2 shows a purchase invoice, which is sent by the supplier to the customer. This document provides a detailed description and quality information of the goods that were sent. Additionally, it includes specific pricing details such as VAT which can be used to determine if the amount due is accurate. In order to provide evidence of business spending, it is required to display the business VAT No for reference by VAT inspectors and the inland revenue.

Example 3 displays the use of a Credit Note, which serves as a receipt when a customer discovers a product fault or mistakenly purchases the wrong product. In such instances, the company provides the customer with the necessary support. Additionally, if goods are lost or stolen and not delivered as expected, a Credit Note may also be issued by the business.

Example 4

shows a Goods Received Note, which serves as a record of actual goods delivery. The supplier produces this note, and the customer signs it upon delivery. The note is cross-checked with the delivery note to ensure that the correct goods have been delivered. The recipient completes a G. R. N for their own record keeping purposes and to verify that all items ordered have been received and are free from damage.