Level: Intermediate
Intermediate Worked Examples: Business Documents as a Source of Information
This set of six graded examples trains students to identify source and non-source documents, complete business documents, and calculate trade and cash discounts for cash and credit transactions.
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Example 1: Invoice and Trade Discount
Question
Solution plan
An invoice is the source document for a credit transaction. Find each item's list value (quantity x unit price) and add them for the total list price. Trade discount = 15% x total list price; it is deducted directly from the list price and is not recorded in the accounts. Invoice amount = total list price - trade discount.
| Particulars | Quantity | Unit Price (RM) | Amount (RM) |
|---|---|---|---|
| Pens (box) | 20 | 15 | 300 |
| A4 paper (ream) | 15 | 12 | 180 |
| Files (box) | 10 | 25 | 250 |
| Total list price | 730 | ||
| Less: Trade discount 15% | 109.50 | ||
| Invoice amount | 620.50 |
Answer
The total list price is RM730. The 15% trade discount is RM109.50. The invoice amount payable by Kedai Buku Amanah is RM620.50.
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Example 2: Trade Discount and Cash Discount
Question
Solution plan
Deduct the trade discount first to get the invoice price: 10% x RM2,000. Payment is made on day 4 (within 7 days), so the 4% cash discount is calculated on the invoice price, not the list price. Cash discount is recorded in the accounts (discount allowed/received). The money-transfer slip is the source document for the payment. Amount paid = invoice price - cash discount.
| Particulars | Amount (RM) |
|---|---|
| List price of goods | 2,000 |
| Less: Trade discount 10% | 200 |
| Invoice price | 1,800 |
| Less: Cash discount 4% | 72 |
| Amount paid | 1,728 |
Answer
The invoice price after trade discount is RM1,800. The 4% cash discount is RM72. The actual amount paid by Kedai Runcit Sejahtera is RM1,728.
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Example 3: Cash Bill for a Cash Sale
Question
Solution plan
A cash bill is the source document for a cash sale. Compute each item's value, sum for the total list price, then deduct the 10% trade discount. There is no cash discount because payment is made immediately in cash.
| Particulars | Quantity | Unit Price (RM) | Amount (RM) |
|---|---|---|---|
| Paint (tin) | 3 | 45 | 135 |
| Paint brushes | 5 | 8 | 40 |
| Aluminium ladders | 2 | 120 | 240 |
| Total list price | 415 | ||
| Less: Trade discount 10% | 41.50 | ||
| Total paid in cash | 373.50 |
Answer
The total list price is RM415. The 10% trade discount is RM41.50. The total paid in cash is RM373.50.
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Example 4: Credit Note for Returned Goods
Question
Solution plan
For sales returns (returns inwards), the seller issues a Credit Note to the buyer to reduce the buyer's debt. The credit note amount must follow the original selling price, i.e. after the same 20% trade discount as on the original invoice. Credit note amount = list price of returns - 20% trade discount.
| Particulars | Quantity | Unit Price (RM) | Amount (RM) |
|---|---|---|---|
| Damaged chairs returned | 2 | 150 | 300 |
| List price of returns | 300 | ||
| Less: Trade discount 20% | 60 | ||
| Credit Note amount | 240 |
Answer
The source document issued by Syarikat Perabot Indah is a Credit Note. The list price of the returns is RM300, the 20% trade discount is RM60, and the amount recorded on the Credit Note is RM240.
Where marks are usually lost
Example 5: Statement of Account as a Non-Source Document
Question
Solution plan
A statement of account is a non-source document sent by the supplier to summarise transactions and remind the customer of the balance owing. Invoices increase the debt (debit column). Credit notes and payment receipts reduce the debt (credit column). The running balance is computed after each transaction: new balance = previous balance + debit - credit.
| Date | Particulars | Debit (RM) | Credit (RM) | Balance (RM) |
|---|---|---|---|---|
| 1 June | Balance b/d | 800 | ||
| 5 June | Invoice No. 101 | 1,200 | 2,000 | |
| 10 June | Credit Note No. 20 | 150 | 1,850 | |
| 18 June | Receipt | 800 | 1,050 | |
| 25 June | Invoice No. 115 | 600 | 1,650 | |
| Balance owing on 30 June | 1,650 |
Answer
After accounting for the invoices, credit note and payment during the month, the balance still owed by Kedai Runcit Bahagia to Pembekal Barangan Runcit Maju on 30 June 2025 is RM1,650.
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Example 6: Matching Source Documents to Transactions
Question
Solution plan
Each transaction generates a particular source document. Credit transactions use invoices (credit sales), credit notes (returns) and debit notes (undercharge). Cash transactions use cash bills or cash register slips (cash sales), receipts (money received), payment vouchers with cheque counterfoils (cheque payments), petty cash vouchers (petty expenses) and bank slips (deposits). Match each transaction to its document and function.
| Transaction | Type | Source Document | Function |
|---|---|---|---|
| (a) Sell goods on credit | Credit | Invoice | Evidence of a credit sale showing the amount owed |
| (b) Customer returns damaged goods | Credit | Credit Note | Reduces the customer's debt for returned goods |
| (c) Sell equipment for cash at the counter | Cash | Cash Bill / Cash Register Slip | Evidence of a cash sale |
| (d) Receive debt payment from a customer | Cash | Receipt | Evidence of money received from the customer |
| (e) Pay shop rent by cheque | Cash | Payment Voucher & Cheque Counterfoil | Evidence and authorisation of payment through the bank |
| (f) Buy postage stamps using petty cash | Cash | Petty Cash Voucher | Evidence of a small petty expense |
| (g) Deposit cash sales into the bank account | Cash | Bank Slip / Deposit Slip | Evidence that money was paid into the bank account |
Answer
Transactions (a) and (b) are credit transactions using an invoice and a credit note. Transactions (c) to (g) involve cash/bank: a cash bill or cash register slip, a receipt, a payment voucher with cheque counterfoil, a petty cash voucher, and a bank slip. Each of these source documents is the written evidence for recording the transaction in the accounting books.
Where marks are usually lost
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