The types of financial transactions and documents Essay Example
The types of financial transactions and documents Essay Example

The types of financial transactions and documents Essay Example

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  • Pages: 3 (623 words)
  • Published: November 22, 2018
  • Type: Report
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The purpose of my assignment is to demonstrate various financial transactions and documents that occur within a business. To prove my comprehension of financial documents, I will provide authentic business documents along with explanations. Specifically, I will showcase purchase and sales documents as well as payment and receipt examples.

This text will cover an explanation of regular financial transactions and record-keeping within organizations, as well as measures taken to prevent fraud and theft. The information is sourced from the "Heinemann GNVQ for business studies" textbook. Additionally, there will be a discussion on purchases and purchase documents, including types such as materials and services with examples.

3) The purchase documentation for wages includes the order placed, purchase invoice, credit note, and goods received note. The acquisition of materials is an essential component of starting a business for proper

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operation. These materials, referred to as business materials, can be purchased by using the aforementioned purchase documents.

Effective business operations necessitate materials and services. Suppliers are sought out for materials, such as wood for furniture makers, which are then utilized in the manufacturing process. Delivery companies also play a crucial role in starting and expanding businesses. For instance, a sandwich bar may depend on a delivery company to provide essential stock and equipment for its operation.

If the delivery van breaks down, causing a loss of income, the sandwich bar will have to close. Income and expenditure are antonyms as income refers to total money received while expenditure denotes money spent. Sale documents recognize receipt of customer orders whereas purchase documents aid in ordering goods.

Every organization that employs workers is required to compensate them through wages for their services

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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.

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