Profit and Loss Account
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Introduction
Task 2 Task 2 Part 1 Financial Documents No matter how good a person Henry is or how good a business idea he has unless he manages his cash flow really well his business will experience problems. This will help Henry to keep an eye on how much he spends and how much money comes into his business. If he can track this well his business should not run out of money to pay for items. I will now outline key documents Henry will need to use in his business to track and record his business activity. 1. Invoice: (To request payments) This is a document used by business to request payment for goods they have sent to other businesses. This will list goods sent and money that will need to be paid. An invoice will usually need paying within thirty days. 2. Cheque: A cheque is usually the best way for a business to make payments (to other businesses) ...read more.
Middle
An invoice has the following information: * Name and address of business * Telephone number and email address * If the business is V.A.T registered it must include its V.A.T number * V.A.T = Value Added Tax All invoices must be dated and numbered consecutively so that sales can be recorded and tracked easily. Documents used in receiving and making payments: If a business (like my DJ business) receives payments for a product they have sold (DJ booking) it will issue a receipt. This is proof that a payment has been made and the payments have also been received. There are a number of ways a business can be paid for the products they sell. The following are examples of different ways customers can make payments. * Credit Card / Debit Card * Cash * Cheque * Vouchers / Gift Card Debit Card - Own money in bank used to pay Credit Card - Money borrowed from the bank which must be paid back with interest. ...read more.
Conclusion
This will help Henry to keep an eye on how much the business makes and how much money goes out of the business. If Henry can keep up with this well his business should not run out of money to pay for items. This is what Henry will need to use in his business to track and record his business activity. Invoice: (To request payments) This is a document used by business to request payment for goods they have sent to other businesses. This will list goods sent and money that will need to be paid. An invoice will usually need paying within thirty days. Cheque: A cheque is usually the best way for a business to make payments (to other businesses) and receive payments from others. A cheque will also provide a record of any transaction that takes place. Henry will need the following to record his financial transaction: * Sales day book. * 2 column cash book Here is an example of a sales day book above and a 2 column cash book on this right. ?? ?? ?? ?? Ahsanul Islam 11RRI 09/02/09 1 ...read more.
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