Tag: documents and procedure used in home trade

Questions Related to documents and procedure used in home trade

It is advisable to send a copy of the statement of account showing arrears of payment to the companies before sending the collection letter.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. True

  2. False

  3. Partly true

  4. None of above

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Correct Option: A
Explanation:

Written notification of the pending amounts, meant to prod past-due customers to make a payment. Collection letters are sent usually one after another, with the tone and language getting more direct with each successive letter, until at least some payment is received. Also called dunning letter.

Invoices when sent with the goods do not require a covering letter. An exception may be made when sending them to a ______________.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. poor customer

  2. old customer

  3. new customer

  4. (a) & (b)

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Correct Option: C
Explanation:

A new customer is an entity (a person, business, or other organization) that has not previously purchased one's goods or services, but has now made a purchase of those goods or services. .Until that point, they are a potential customer or a prospective customer.

When a customer returns goods a statement called " ________" is sent to him. This informs the customer that his account has been credited to the extent of value of the goods returned.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. discount note

  2. cash sales note

  3. debit note

  4. credit note

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Correct Option: D
Explanation:

A credit note or credit memorandum is a commercial document issued by a seller to a buyer. Credit notes act as a Source document for the Sales return journal. In other words the credit note is evidence of the reduction in sales.

The abbreviation "E&OE" stands for _______________.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. Errors and Omitted Errors

  2. Expected and Omitted Errors

  3. Errors and Omissions Expected

  4. Exceptions and Omissions

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Correct Option: C
Explanation:

Errors and omissions excepted is a phrase used in an attempt to reduce legal liability for potentially incorrect or incomplete information supplied in a contractually related document such as a quotation or specification.

Proforma Invoice may be used for _________________.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. To enable calculation of taxes and duties payable.

  2. To give details and prices of goods being sent on approval.

  3. As a demand for payment when dealing with a new customer

  4. All of above

Show answer
Correct Option: D
Explanation:

A proforma invoice is a document sent to a buyer in certain circumstances - usually before all invoice details An abridged or estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods. 

Pro forma invoices are commonly used as preliminary invoices with a quotation, or for customs purposes in importation. They differ from a normal invoice in not being a demand or request for payment.

While returning goods to the suppliers, a statement called "_________" which is sent to them for their information. It informs the supplier that his account has been debited to the extent of the value of the goods returned, it contains the name and address of the supplier, the description of the goods returned etc.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. discount note

  2. cash sales note

  3. debit note

  4. credit note

Show answer
Correct Option: C
Explanation:

A debit note or debit memorandum is a commercial document issued by a buyer to a seller as a means of formally requesting a credit note. Debit note acts as the Source document to the Purchase returns journal. In other words it is an evidence for the occurrence of a reduction in expenses.

_________ may be used for several purposes including as a quotation or to give details and prices of goods being sent on approval.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. Proforma Invoice

  2. Statement of Account

  3. Invoice

  4. Credit/Debit Notes

Show answer
Correct Option: A
Explanation:

A proforma invoice is a document sent to a buyer in certain circumstances - usually before all invoice details are known.

An abridged or estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods. Proforma invoices are commonly used as preliminary invoices with a quotation, or for customs purposes in importation. They differ from a normal invoice in not being a demand or request for payment.

It is interesting to note that _______ as well as _______ are similar insofar as both give the details of goods.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. invoices, delivery challans

  2. delivery challans, Statement of Account

  3. statement of account, credit/debit notes

  4. credit notes, statement of account

Show answer
Correct Option: A
Explanation:

A Delivery Challan is created in situations where goods are being transported from one place to another which may or may not result in sales. Example: Transfer of goods from the Head Office to its branches. Delivery Challans are sent along with the shipment of goods.

An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.

If the payee reports that he/she has received cheques, then the seller should promptly request bank to stop payment.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. True

  2. False

  3. Partly true

  4. None of above

Show answer
Correct Option: B
Explanation:

A stop payment is an order by a customer of a financial institution or to a money order issuer to refuse to pay a check or draft drawn on the customer's account, and to return the draft to the depositor unpaid. 

Stop payments are used in cases where the depositor does not want the check to be paid.

_______ is chargeable from companies engaged in production of goods at applicable tariffs.

business organisation mercantile agents and account sales course of business transaction in home trade documents and procedure used in home trade home trade: agents and procedures

  1. Custom duty

  2. Excise duty

  3. Value Added Tax

  4. Goods & Service Tax

Show answer
Correct Option: D
Explanation:

Goods and Services Tax is an indirect tax levied in India on the supply of goods and services. GST is levied at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer.