23/11/2025
O Level Accounting
Chapter: Business document
Purchase Order (3 marks): A purchase order is a document sent by a buyer to a supplier requesting specific goods or services. It states the quantity, price, and delivery details. It acts as a legal offer to buy and helps the supplier process the order accurately.
Purchase Invoice (3 marks): A purchase invoice is issued by the supplier to the buyer after goods or services have been delivered. It shows the amount owed, including prices, quantities, and payment terms. It is used by the buyer to record expenses and arrange payment.
Sales Invoice (3 marks): A sales invoice is a document sent by a business to a customer requesting payment for goods or services provided. It includes details such as price, quantity, date, and total amount due. It is used by the seller to record revenue.
Credit Note (3 marks): A credit note is issued by the seller to the buyer to reduce the amount owed. It is used when goods are returned, damaged, or when the seller has overcharged. It adjusts the customer’s account balance.
Statement of Account (3 marks): A statement of account is a summary sent by a supplier to a customer showing all transactions over a period, including invoices, payments, and outstanding balances. It helps both parties keep accurate financial records.
Remittance Advice (3 marks): A remittance advice is a document sent by a buyer to a supplier confirming that payment has been made. It lists the invoices being paid and helps the supplier match payments with customer accounts.
