At the end of every month Zenith Distribution sends Kestrel Mobile a document listing the invoices, credit notes and payments recorded on its account during...
Question 1 Report
At the end of every month Zenith Distribution sends Kestrel Mobile a document listing the invoices, credit notes and payments recorded on its account during the month, together with the amount still outstanding at that date. Which document has Kestrel Mobile received?
Answer Details
The document described is a periodic summary sent by a supplier to a credit customer, listing every invoice, credit note and payment recorded on the account during the month and showing the balance still outstanding. That is a statement of account.
Its purpose is to let Kestrel Mobile check the supplier's version of the account against its own purchases ledger record of Zenith Distribution, so that missing invoices, unrecorded credit notes or payments in transit can be identified before payment is made. No entries are made in the books from a statement of account; it is a checking document, and the ledger entries come from the invoices and credit notes themselves.
A remittance advice travels the other way, from Kestrel to Zenith, telling the supplier which invoices a payment covers. A pro forma invoice is issued before a sale is agreed, typically where goods are supplied on approval or where payment is required in advance, and it never creates a ledger entry. A goods received note is prepared internally when a delivery arrives, recording what was actually received so that it can be checked against the invoice.
The clue in the wording is the combination of a full month of activity and a closing balance; only a statement of account carries both.
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