Here is another article for you specially for those who are doing ACCA or diploma in Accountancy. In this article we are going to discuss briefly about Business transaction, Business documentation and Sales tax.
Now we are going to discuss about Business transaction.
First we have a short definition of business,
- Business means any activity which a person do for earning profit.
- Business is a commercial organization.
- Making profit by investing capital.
Transaction: it is the process of exchanging values.
Whenever purchases or sales take place there is always a business transaction.
Usually there is two main types of business transaction, one is cash and second one is credit transaction.
Cash transaction: the process of buying or selling by paying cash instantly known as cash transaction.
Credit transaction: the process of buying and selling sometimes occurs earlier and do agreement to pay later
Now let’s move to discuss about Business Documentation
The document means the evidence of the transaction. There are two main types of business documents,
Internal Documentation: These documents are personal for any organization or for a business such as purchase order, attendance sheet etc.
External Documentation: this is another document which is very important for business because this document show the relationship between an organization and customer. Usually this document shows the sales. example: purchase invoice.
Invoice: it is a document send by a supplier to a purchaser to request for payment.
Delivery note: this is the conformation document which is send to the purchaser by a supplier because to make sure whether the goods are received.
This document is brought back to supplier as a proof that goods are delivered.
Quotation: this document shows the price details of selected goods.
As we have now knowledge about Business transaction and business documentation so we are going to discuss now sales tax.
Sales tax is charged on products which is manufactured for the purpose of selling.
There are two types of sales tax,
Input sales tax: charged when someone purchase product.
Output sales tax: charged on selling goods or products.