Trade and Settlement Discounts Quiz

A business structure where the owners' personal liability is limited to the value of the business's assets.

A legal entity separate from its owners. It has its own legal obligations and must pay corporation tax on its profits.

A type of business where the owner is personally liable for all debts and obligations.

A record of all financial transactions related to a business's operations.

The money a business earns, usually from selling goods or services.

Money spent by a business on acquiring goods for resale.

Expenses incurred by a business, including utilities, rent, and salaries.

The amount of money a business earns after deducting all expenses.

Money owed to a business by customers for goods or services already provided.

The cost of goods or services a business sells. This is the initial value of the items you buy to sell later.

The cost of running a business, including rent, salaries, and utilities.

Anything the business owns that has a monetary value and will last for more than one accounting period.

The money a business earns from selling goods or services.

Money owed by a business to others, including suppliers, lenders, and employees.

The profit a business makes after deducting all expenses from all revenues.

A report that shows a business's financial performance over a period of time.

The value of goods or services sold minus the direct costs incurred in producing those goods or services.

The value of goods or services sold minus the direct costs incurred in producing those goods or services, and all other operating expenses.

A financial statement that represents a snapshot of a company's assets, liabilities, and equity at a specific point in time.

The total value of all items owned by a business, including cash, inventory, and equipment.

The total value of all obligations owed by a business to others, including loans, accounts payable, and accrued expenses.

The ownership stake in a business, calculated as the difference between assets and liabilities.

A structured list of accounts that helps categorize and track all financial transactions within a business.

A financial statement that summarizes a business's income and expenses over a period of time.

The original price of a product before any discounts are applied. It's the price you might see in a catalog or advertisement.

A discount offered to specific customers or groups to encourage purchases or promote products. This discount is usually given by the supplier.

A discount given to customers for making early payments. This encourages prompt payment and helps suppliers manage cash flow.

The price a customer pays after all discounts are applied.

Calculating the net price involves first applying the trade discount and then the settlement discount.

The percentage reduction offered in a trade or settlement discount.

The percentage you pay after a trade or settlement discount is applied.

Settlement discount is applied after the trade discount has been factored in.

A system where reminders are sent to clients proactively before their payment due date to encourage timely payments.

Regularly reviewing the outstanding payments and prioritizing the oldest or largest debts for prompt resolution.

Using a range of communication tools and methods, such as email, phone calls, and even personal visits, to follow up on late payments.

Setting clear payment terms with clients and ensuring they acknowledge and understand those terms.

Actively checking the accuracy of invoices to avoid errors and maintain professionalism.

Implementing a system where statements are sent to customers automatically on a regular basis.

Promptly addressing any disputes raised by clients to ensure timely payment.

Using software to monitor and track your accounts receivable, providing insights into the age of outstanding debts.

A professional responsibility to maintain the privacy of information obtained through professional and business relationships, and not disclose it to others without proper authorization unless legally obligated.

Adhering to laws and regulations that prevent actions that could damage the reputation of the profession, ensuring both your professional and your client's reputation stays intact.

The recordkeeping system that uses physical papers and notebooks to track financial transactions, making it susceptible to mistakes due to manual input.

A system that relies on specialized software to record and manage financial transactions, providing greater accuracy and efficiency.

A set of laws that protect personal information and ensure its handling is lawful, fair, and transparent, particularly when working with client, supplier, and employee data.