Introduction to Business Documents (Cambridge (CIE) IGCSE Accounting)
Revision Note
Written by: Dan Finlay
Reviewed by: Lucy Kirkham
Purpose of Business Documents
What are business documents?
Business documents are used to keep records of all transactions
They are used as sources of information
The amounts are then entered into the books of prime entry
They can be used to check potential errors
What business documents do I need to know?
Invoices
Debit notes
Credit notes
Statements of account
Cheques
Cheque counterfoils
Receipts
Paying-in slips
Bank statements
Petty cash vouchers
Trade Discount
What is a trade discount?
A trade discount is a reduction in the selling price of goods or services
Trade discount might be offered
If the customer buys in bulk
If the customer is a loyal and regular customer
Trade discount is applied before a transaction takes place
The discounted amount is the value that is entered into the books of prime entry
The value of the trade discount is not entered into the books of prime entry
Trade discount is not part of the double entry system
Cash Discount
What is a cash discount?
A cash discount is offered to credit customers for early repayment of an invoice
The supplier will state the deadline for payment in order to claim the cash discount
The amount before the cash discount is entered into the books of prime entry
When the customer pays early and claims the cash discount
The amount of cash discount is recorded in the books of prime entry
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