Grade: IX

Subject: ACCOUNTING

Chapter 6:Business Documents

 Learning outcome

 What are business documents?

Why are they maintained in business?

What are the different types of business documents?

Uses of each type of document as source of information

Understand the layout of business document.

Invoice
It is issued by the supplier of goods on credit

It contains the following information-

 The name and address of the supplier
 The name and address of the customer
 The date
 Full details, quantity and price of the goods supplied
 Trade discount if deducted is shown in the invoice

The customer receives the original invoice and uses it to record the
purchase of goods on credit

The supplier keeps a copy of the invoice and uses it to record the sale
of goods on credit.
Layout of Invoice
Debit Note

 It is issued by the purchaser of goods on credit to request a reduction in

the invoice received

It contains the following information-

 The name and address of the supplier
 The name and address of the customer
 The date
 Full details, quantity and price of the goods returned or overcharged

 Neither the supplier nor the customer makes any entry in their
accounting records in respect of a debit note

 A debit note is merely a request to the supplier to reduce the total of the
original invoice.
Layout of a Debit note
Credit Note

 It is issued by the seller of goods on credit to notify of a reduction in

an invoice previously issued

It contains the following information-

 The name and address of the supplier
 The name and address of the customer
 The date
 Full details, quantity and price of the goods returned or overcharged

The customer receives the original credit note and uses it to record
the purchases returns

The supplier keeps a copy of the credit note and uses it to record the
sales return
Layout of a Credit note
 Statement of Account
 At the end of each month the seller usually issues each customer with a
statement of account
 It is a summary of the transactions for the month
 It is a reminder to the customer of the amount outstanding
 It contains the following information-
 The name and address of the supplier
 The name and address of the customer
 The date
 Balance owing at the start of the period
 Invoices and credit note issued
 Payments received
 Any cash discounts allowed
 The balance owing at the end of the month
Neither supplier nor the customer makes any entries in their accounting
records in respect of a statement of account
Layout of Statement of Account
 Cheque

 A cheque is a written order to a bank to pay a stated sum of money to the

person or business named on the order.

 A book of preprinted cheques is issued by the bank, and the customer is only
required to complete the necessary details of date, amount and payee (the person
or business to whom the money is to be paid)

The customer keeps the cheque counterfoil and uses it to make entry in the
cash book to show the money paid out of the bank and make a note of the
discount received

The supplier uses the counterfoil of the pay-in-slip to make entry in the cash
book to show money received and to make a note of the discount allowed
Layout of Cheque
 Receipt

A receipt is a written acknowledgement of the money received and acts as a

proof of payment
 Sequence and Flow of documents

• Invoice • Seller to Customer

• Debit note • Customer to Seller

• Credit note • Seller to Customer

• Statement of account • Seller to Customer

• Cheque • Customer to Seller

• Receipt • Seller to Customer

Thank You