(a) State one use of each of the following: (i) Letter of enquiry (ii) Invoice (iii)Advice note (iv) Credit note (v) Statement of account (vi) Debit note. (...

Answer Details

(a) One use of each document

• (i) Letter of enquiry: It is written by a prospective buyer to a seller to request information about goods, such as prices, quality, terms of trade and availability, before placing an order.
• (ii) Invoice: It informs the buyer of the full details and total amount owed for goods sold on credit, showing quantity, description, unit price, trade discount and the net amount payable.
• (iii) Advice note: It is sent by the seller to notify the buyer that the ordered goods have been despatched and are on their way, so that the buyer can prepare to receive them.
• (iv) Credit note: It is sent by the seller to reduce the amount owed by the buyer, usually issued when goods are returned, when an overcharge has been made on the invoice, or for returned empties.
• (v) Statement of account: It is a periodic (usually monthly) summary sent by the seller showing the opening balance, invoices, credit notes, payments and the closing balance owed, serving as a request for payment.
• (vi) Debit note: It is sent by the seller to increase the amount owed by the buyer, usually issued to correct an undercharge on the invoice or to charge for goods omitted from the original invoice.

(b) Automatic vending

Advantages

• It provides service twenty-four hours a day, allowing customers to buy even when shops are closed.
• It saves labour cost because no shop assistant or salesman is required to attend to customers.

Disadvantages

• The machine can develop faults or jam, causing loss of money or failure to deliver goods to the customer.
• It is limited to small, standardised, low-value items and cannot handle bargaining, credit sales or personal service.