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Friday, July 15, 2011

Usual Terms Relating to Purchase Book

  1. Invoice: Purchase book is prepared on the basis of a statement which is called as an invoice. It consists the details of quantities and prices of materials or goods purchased. It also shows the discount allowed and the terms and conditions of payment. An invoice is written or printed document sent by seller to buyer which contains the following components.
  • Quantity of goods.
  • Rate per unit and the total amount of goods.
  • Quality, brand and size of goods.
  • Amount of discount allowed.
  • Means and mode of transport etc.
2. Trade Discount: Trade discount is a deduction allowed from the invoice or list price of the goods. It is deducted from the invoice and allowed by the supplier to the retailers if they purchase goods more than a certain quantity or certain amount. A certain percentage of gross amount of purchases is considered as trade discount.

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