Principles Of Accounts
St. Vincent Grammar School
* An invoice is a commercial document issued by a seller to a buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the sale transaction only. * An invoice indicates the sale transaction only. Payment terms are independent of the invoice and are negotiated by the buyer and the seller. Payment terms are usually included on the invoice. The buyer could have already paid for the products or services listed on the invoice. Buyer can also have a maximum number of days in which to pay for these goods and is sometimes offered a discount if paid before the due date. * An invoice is a detailed bill left by vendors and outside suppliers for goods or services rendered to a company. * Typically, it lists the quantity of each item, prices, billable hours, a service description, and a contact address for payment. * In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so in addition to quantity, price and discount the invoicing amount is also based on duration. Generally each line of a rental invoice will refer to the actual hours, days, weeks, months, etc., being billed. The main parts of an invoice.
* The word invoice at the top
* A unique reference number
* Date of the invoice
* Tax payments if relevant
* Name and contact details of the seller
* Tax or company registration details of seller
* Name and contact details of the buyer
* Date that the product was sent or delivered
* Purchase order number
* Description of the product(s)
* Unit price(s) of the product(s)(If relevant)
* Total amount charged (optionally with breakdown of taxes, if relevant) * Payment terms (including method of payment, date of payment, and details about charges for late payment) When is the invoice prepared?
* An invoice is issued by a seller to a buyer when he/she purchases a product or acquires a service that the seller has provided.
Function of an Invoice
* As a legal document, an invoice can be used as evidence of an incurred debt. The recipient of the goods or services can challenge the legitimacy of individual charges, but the document itself is considered a bona fide debt. * Sometimes, a vendor or serviceperson cannot collect on a bill immediately, so the company will send a bill at a later date for payment. * In other cases, the actual daily expense of a service may be so low that a company will simply wait until the charges have accumulated to a certain point, and send a bill to cover all of the costs at once. * Not all invoices are bills of sale, however. A manufacturer may send out a "shipping invoice," which details all of the parts and accessories included in a particular order. This document should be compared to the actual parts received by the store or customer. * Car dealers also receive an invoice from the factory that details the actual price of the basic vehicle and any optional equipment installed. The dealer may offer a discount to the customer which seems to fall below the invoice price.
Diagram of an Invoice
* A cash receipt is a simple document showing proof of a transaction that is often issued at the time of the completion of a sale. * Many businesses issue such receipts as a matter of course. While the printed document is normally a simple record of the transaction, some examples can be very detailed. * The vendor totals the items that are purchased by the customer, adds any applicable taxes, and records the cash received from the client. If change is due, the document usually makes note of the amount of the refund to the customer. * Because of the invention of internet shopping it has led to the creation of electronic receipts as well. Many...
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