4. What documents are used by a business when paying for goods? (a) Statement of account
A statement of account is a summary of the transactions that have occurred between the seller and the business customer over the previous month. It shows the opening balance (any money owed by the customer at the start of the month) plus details of all the transactions between the seller and the buyer during the month. A statement of account acts as a demand for payment of any sums still owed.
The balance forward shown on the 1st of a month shows any amount previously owed by the business customer.
STATEMENT NO. 1 Traction Bikes
Unit 2, Swords Business Park, Dublin Tel 01 2123245
€5,808 was received on 28/6/20–. Payment was made by electronic funds transfer (EFT) from Outdoor World’s bank account to Traction Bikes’ bank account. This was done using the Single European Payments Area (SEPA) system.
The balance column shows a running balance of the total money owed at a particular date. This includes an invoice on the 21/6/20— when Outdoor World ordered additional bike parts for €448.
(b) Receipt for payment Once the seller receives payment they will issue a receipt. This confirms that a particular transaction is now complete.
264
Debit (e)
5,808 448 5,808
Credit (e)
Balance (e)
0.00 5,808
132 5,676 6,124 316
Any payments made or credit notes issued are shown in the credit column.
