Source Documents (Identify the source document used)

An invoice ​ ​ (a)   ​ credit customers of the amount owed after the business sold goods or provided services on ​ (b)   .

• informs
• credit
• acknowledges
• reminds
• cash

Alan Trading buys and sells fruits.

The following transaction or activity took place in Alan Trading.

State the source document that Alan Trading used to record the transaction or activity.

Bought fruits on credit.

• Invoice

• Debit Note

Answer explanation

Alan Trading will receive invoice from the supplier when it purchases goods on credit.

Alan Trading buys and sells fruits. The following transaction/ activity took place in Alan Trading. State the source document that Alan Trading used to record the transaction/ activity.

Bought delivery van ON CREDIT.

• Credit note

• Invoice

Answer explanation

When business buys on credit, the business will receive an invoice from the supplier. This includes the purchase of inventory and other items such as motor vehicles.

Alan Trading buys and sells fruits.

The following transaction/ activity took place in Alan Trading.

State the source document that Alan Trading used to record the transaction/ activity.

Sold fruits ON CREDIT.

• Receipt

• Invoice

Alan Trading buys and sells fruits.

The following transaction/ activity took place in Alan Trading.

State the source document that Alan Trading used to record the transaction/ activity.

Bought fruits ON CREDIT.

• Debit Note

• Credit Note

• Receipt

• Invoice

A debit note ​ (a)   the amount owed by ​ (b)   customers who were previously ​ (c)   .

• increases
• credit
• undercharged

Alan Trading buys and sells fruits.

The following transaction/ activity took place in Alan Trading.

State the source document that Alan Trading used to record the transaction/ activity.

INCREASE amount owing by credit customer due to earlier undercharge.

• Debit Note

• Invoice

Alan Trading buys and sells fruits. The following transaction/ activity took place in Alan Trading. State the source document that Alan Trading used to record the transaction/ activity.

Credit suppliers of fruits INCREASE the amount owing by Alan Trading due to earlier undercharge.

• Debit Note

• Credit Note

Answer explanation

Debit note increases the invoiced amount.

A credit note ​ (a)   the amount owed by ​ (b)   customers who were previously ​overcharged or after goods were returned.

• reduces
• credit
• increases
• cash

Alan Trading buys and sells fruits. The following transaction/ activity took place in Alan Trading. State the source document that Alan Trading used to record the transaction/ activity.

REDUCES amount owing by credit customers due to returns of goods.

• Debit Note

• Credit Note

Answer explanation

The credit note reduces amount owed by credit customers who were previously overcharged or after goods were returned.