Source Documents prove a transaction has taken place between a buyer and a seller.
Buying on credit – “Buy now pay later”
If a buyer would like to purchase a product they can fill in a purchase order and send it to the seller .
The seller will receive the purchase order then gather the products accordingly.
They will then send the product to the buyer along with a sales invoice and delivery note.
The buyer will receive the product along with a purchase invoice and a delivery note.
The delivery note will show the quantity of products that have been delivered
The invoice will show the cost/price along with the discounts provided
There are two discounts available; trade and cash discount
If the buyer has decided to buy a large quantity they may receive a trade discount
If the buyer pays early they may receive a cash discount
If the buyer is not happy with the product they may return it. The seller will send out a credit note to the buyer
Buying on cash – “Buy now pay now”
When someone pays on cash for a good they will receive a cash receipts
When a person deposits cash into the bank, they would keep a paying in slip counterfoil
When a person writes a cheque to another person they will keep a cheque counterfoil
Bank statements will show any direct debits and standing orders.