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This is a Credit Sales, Business Documents and Bookkeeping Question - Junior Cycle Business Studies - Question 2 - 2016

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This is a Credit Sales, Business Documents and Bookkeeping Question. Answer all parts of this question: The following Quotation was received by Maurice O'Keeffe, P... show full transcript

Worked Solution & Example Answer:This is a Credit Sales, Business Documents and Bookkeeping Question - Junior Cycle Business Studies - Question 2 - 2016

Step 1

What procedures should FOOTWEAR Ltd use when processing outgoing quotations?

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Answer

  1. Check that the name and address of the customer is correct.

  2. File a copy of the quotation for record-keeping and future reference.

Step 2

Complete the blank Invoice on the sheet supplied with this paper.

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Answer

FOOTWEAR Ltd, Castlebar, Co. Mayo INVOICE No. 37

Telephone: 094 264691 VAT Reg. No. IE 8799654

To: Mr Maurice O'Keeffe BUSYFEET Ltd Donegal Street Sligo

Date: 30/04/2016 Your Order No: 56

QUANTITYDESCRIPTIONPRICE EACH €TOTAL €
0Terry soccer boots (assorted sizes)1300
60Blue Trainers704,200
50Leisure walking shoes1206,000
40Crock beach shoes200

Total (Excluding VAT) | 11,000 Trade Discount | 3,300 Subtotal | 7,700 VAT | 1,771 Total (Including VAT) | 9,471 E & OE

Step 3

Advise FOOTWEAR Ltd on how it might prevent problems, like the above, in the future.

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Answer

  1. Implement a quality control system to check items before shipment.

  2. Ensure timely communication with the supplier regarding the condition of received goods.

  3. Train staff on proper packaging to prevent damage during shipping.

Step 4

Calculate the amount of the refund that was inserted on the Credit Note.

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Answer

The refund for the rejected 40 Crock beach shoes, priced at €20 each:

Amount of Refund = 40 shoes * €20 per shoe = €800.

Step 5

Record the Credit Note No. 12 in the Sales Returns Book of FOOTWEAR Ltd on the sheet supplied with this paper.

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Answer

DateDetailsCredit Note No.Net €VAT €Total €
07/05/2016BUSYFEET Ltd12800128.8688.80

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