UP Board Solutions Class 10 Commerce Chapter 10 Invoice Mercentile Agents and Account Sale

Invoice, Mercantile Agents And Account Sale Objective Type Questions (1 Mark)

Question 1. Invoice is a statement of goods prepared by the:
(a) Buyer
(b) Customer
(c) Seller
(d) None of these
Answer: (c) Seller
In simple words: An invoice is created by the seller to document the goods sold and the amount owed by the buyer. It's a record of the transaction from the seller's perspective.

🎯 Exam Tip: Understanding the roles of buyer and seller in financial documents like invoices is fundamental for commerce students. This is a basic concept for quick recall.

Question 2. The invoice is the final evidence of:
(a) Purchase
(b) Sale
(c) Goods
(d) None of these
Answer: (b) Sale
In simple words: An invoice serves as formal proof that a sale transaction has occurred, detailing the items, prices, and terms agreed upon by the seller and buyer.

🎯 Exam Tip: Recognizing the legal and financial significance of an invoice as evidence of a completed sale is crucial for comprehending business transactions.

Question 3. The expenses mentioned in the proforma invoice are:
(a) Actual
(b) Estimated
(c) Either (a) or
(b) (d) None of these
Answer: (b) Estimated
In simple words: A proforma invoice is a preliminary bill, so the expenses listed on it are typically estimates rather than final actual costs. It provides an advance idea of the transaction's value.

🎯 Exam Tip: Differentiate between an ordinary invoice (actual costs) and a proforma invoice (estimated costs) to avoid common misconceptions in examinations.

Question 4. When the seller quotes any price for the goods, the price is for the goods to be delivered of the godown of the ......
(a) buyer
(b) customer
(c) seller
(d) None of these
Answer: (c) seller
In simple words: Unless specified otherwise, a quoted price for goods implies that the buyer must arrange for pick-up from the seller's godown, with transport costs borne by the buyer.

🎯 Exam Tip: Pay attention to the "delivery terms" of a price quote. "Ex-godown seller" means the price covers goods at the seller's location, impacting total cost for the buyer.

Question 5. Amount payable is that amount which the buyer has to pay to the seller for the goods ......
(a) Sold
(b) Purchased
(c) Either (a) or
(b) (d) None of these
Answer: (b) Purchased
In simple words: The amount payable by the buyer is for the goods they have purchased, which corresponds to the goods the seller has sold.

🎯 Exam Tip: This question tests basic terminology. "Amount payable" from the buyer's perspective relates directly to the goods purchased.

Question 6. The statement which the selling agent prepares and submits to his principal is called:
(a) Invoice
(b) Account Sales
(c) Sales Letter
(d) None of these
Answer: (b) Account Sales
In simple words: An account sales is a document an agent sends to their principal, detailing the goods sold, expenses incurred, and commission earned on behalf of the principal.

🎯 Exam Tip: Clearly distinguish an 'Invoice' (from seller to buyer) from an 'Account Sales' (from agent to principal), as their purposes and senders/receivers differ significantly.

Question 7. Purchase agents appointed to purchase goods on behalf of their .......
(a) Agent
(b) Customer
(c) Principal
(d) None of these
Answer: (c) Principal
In simple words: A purchase agent acts on behalf of another person, called the principal, to acquire goods according to their instructions.

🎯 Exam Tip: Remember that an agent always represents a 'principal', whether for buying or selling, and acts under their authority.

Question 8. A broker is an agent employed to negotiate for the sale and purchase of ......
(a) Car
(b) Building
(c) Goodwill
(d) Goods
Answer: (d) Goods
In simple words: A broker facilitates transactions primarily for goods, but can also deal in other assets like shares or real estate, without taking possession of the items themselves.

🎯 Exam Tip: While brokers can deal in various assets, their core function in commerce often relates to negotiating deals for "goods."

Question 9. When an agent is appointed for accomplishing any particular or special job, he is known as .......
(a) General Agent
(b) Local Agent
(c) Special Agent
(d) None of these
Answer: (c) Special Agent
In simple words: A special agent is authorized to perform a specific task or a particular type of transaction, and their authority is limited to that defined scope.

🎯 Exam Tip: Differentiate agent types: a "special agent" has limited authority for a single task, while a "general agent" has broader powers for ongoing business activities.

Question 10. The principal is responsible for all the deeds of the general agent:
(a) Local Agent
(b) General Agent
(c) Special Agent
(d) None of these
Answer: (b) General Agent
In simple words: A general agent has broad authority to act on behalf of their principal in all matters relating to a particular business or activity, making the principal liable for their actions within that scope.

🎯 Exam Tip: The extent of the principal's liability depends on the type of agent; general agents imply wider responsibility for the principal due to their broader authority.

Question 11. A merchant middleman who sells chiefly to its:
(a) Wholesaler
(b) Customer
(c) Retailers
(d) None of these
Answer: (c) Retailers
In simple words: A merchant middleman, often a wholesaler, typically sells goods in bulk to retailers who then sell them to the final consumers.

🎯 Exam Tip: Understand the distribution channel: manufacturers sell to wholesalers, who sell to retailers, who then sell to consumers. This hierarchy is key.

Question 12. Wholesaler invests a lot of .........
(a) Capital in business
(b) labour in business
(c) land in business
(d) None of these
Answer: (a) Capital in business
In simple words: Wholesalers often need substantial capital to purchase goods in large quantities, maintain warehouses, and manage inventory before selling to retailers.

🎯 Exam Tip: High investment in 'capital' is a defining characteristic of wholesale business, distinguishing it from retailing which requires less inventory holding.

Question 13. Wholesaler purchases goods in .......
(a) Bulk
(b) Small quantity
(c) Either (a) or
(b) (d) None of these
Answer: (a) Bulk
In simple words: Wholesalers specialize in buying goods in very large quantities directly from manufacturers, which allows them to get lower prices per unit.

🎯 Exam Tip: The core function of a wholesaler is purchasing in "bulk" to achieve economies of scale and supply smaller quantities to retailers.

Question 14. V.P.P. stands for:
(a) Valuable Payment Post
(b) Value Payable Post
(c) Value Payable Prepaid
(d) None of these
Answer: (b) Value Payable Post
In simple words: V.P.P. is a postal service where the post office collects payment from the recipient upon delivery and remits it to the sender.

🎯 Exam Tip: Knowing common commercial abbreviations like V.P.P. (Value Payable Post) is essential for understanding historical and some current trade practices.

Question 15. Super market is a business organisation which is established and run on .......
(a) Small scale
(b) Large scale
(c) either (a) or
(b) (d) None of these
Answer: (b) Large scale
In simple words: Supermarkets are typically large retail stores operating on a significant scale, offering a wide range of products under one roof.

🎯 Exam Tip: Supermarkets, by definition and operation, are large-scale retail formats known for variety and volume of sales.

Invoice, Mercantile Agents And Account Sale Definite Answer Type Questions (1 Mark)

Question 1. What kind of statement of goods prepared by the seller?
Answer: Invoice.
In simple words: The seller prepares an Invoice to detail the goods sold, their prices, and the total amount due from the buyer.

🎯 Exam Tip: A direct question requiring the specific term "Invoice," highlighting its preparation by the seller.

Question 2. Name of the document which is prepared even before the sale for giving information to the concerned customer.
Answer: Proforma Invoice.
In simple words: A Proforma Invoice is issued before the final sale to provide an estimate of costs and details for the customer's information.

🎯 Exam Tip: The key differentiator here is "even before the sale," which points directly to a Proforma Invoice as a preliminary document.

Question 3. Name the agents who are appointed to sell goods on behalf of their principals.
Answer: Sale Agents.
In simple words: Sale agents are individuals or firms specifically tasked with finding buyers and selling goods for a principal.

🎯 Exam Tip: This is a straightforward recall question; ensure accurate terminology for different types of agents.

Question 4. Name the agent appointed to do certain acts on behalf of the principal in return for a commission.
Answer: Commission Agent.
In simple words: A commission agent performs specific duties for a principal, such as buying or selling, and is compensated with a percentage of the transaction value.

🎯 Exam Tip: The phrase "in return for a commission" is a strong indicator for identifying a Commission Agent.

Question 5. What kind of commission gives on a credit sale to an agent?
Answer: Del Credere Commission.
In simple words: Del Credere commission is an additional payment given to an agent for guaranteeing that all credit sales made on behalf of the principal will be paid, thus covering potential bad debts.

🎯 Exam Tip: "Del Credere" is a specific type of commission tied to guaranteeing credit sales; remember its purpose for avoiding bad debts.

Question 6. Name the business organisation which run on a large scale.
Answer: Super Market.
In simple words: A Super Market is a large retail establishment that operates on a wide scale, offering a vast array of products to consumers.

🎯 Exam Tip: Relate "large scale" operation in retail to specific formats like "Super Market" or "Departmental Store."

Question 7. In which country consumers co-operative store originated?
Answer: England.
In simple words: The concept of consumers' co-operative stores, where members collectively own and operate a retail business for mutual benefit, first emerged in England.

🎯 Exam Tip: This is a factual question about the historical origin of a specific business model. Remembering key historical facts is important.

Invoice, Mercantile Agents And Account Sale Very Short Answer Type Questions (2 Marks)

Question 1. What is Invoice?
Answer: Invoice is a statement of goods prepared by the seller and is sent to the buyer along with the Railway receipt or transport documents. The statement of goods contains the list of goods which are sent to the buyer according to his order.
In simple words: An invoice is a seller's document detailing products, quantities, prices, and total amount due, sent to the buyer as proof of sale and a payment request.

🎯 Exam Tip: Clearly state who prepares the invoice (seller), who receives it (buyer), and its core content (goods list, price, total, and sometimes transport details).

Question 2. What do you mean by proforma invoice?
Answer: Proforma Invoice: It is essential that an ordinary invoice should be distinguished from a proforma invoice. The latter is an invoice merely for the form's sake or for the sake of information, hence, it is called Proforma Invoice.
In simple words: A proforma invoice is a draft invoice providing an estimated cost and details before a sale is finalized, used for preliminary information or customs.

🎯 Exam Tip: Emphasize that a proforma invoice is for "information" or "form's sake" and is *not* a final demand for payment, unlike a regular invoice.

Question 3. What is an agent?
Answer: A person acting on behalf of another person is known as an agent. An agent is a person employed to do any act for another or to represent others in dealings with the third person.
In simple words: An agent is an individual or entity authorized to act on behalf of another person (the principal) in business dealings, creating a legal relationship between the principal and third parties.

🎯 Exam Tip: Define an agent by their key characteristic: acting "on behalf of another" (the principal) and representing them in interactions with third parties.

Question 4. Who is Del Credere Agent?
Answer: Del Credere agent is an agent appointed for the sale of certain goods and who gives a guarantee that all the credit sales would be duly paid for, in return for an extra commission known as 'del credere commission'.
In simple words: A Del Credere agent is an agent who guarantees the principal against loss from bad debts on credit sales, receiving an extra commission for this added responsibility.

🎯 Exam Tip: The unique feature of a Del Credere agent is their guarantee against bad debts on credit sales, for which they earn a special commission.

Question 5. What is account sale?
Answer: The statement which the selling agent prepares and submits to his principal is called account sales, (account of sales). Therefore, account sale is a statement regarding the sale of goods, which is periodically submitted to the principal by his agent.
In simple words: An account sale is a report sent by a selling agent to their principal, detailing sales made, expenses, and commission, ultimately showing the net amount due to the principal.

🎯 Exam Tip: Clearly state that an account sale is from the *agent* to the *principal*, detailing the *sales* made on the principal's behalf, distinguishing it from an invoice.

Question 6. Give any two characteristics of an agent.
Answer: Two characteristics of an agent are:
• Right on Goods: The agent does not pass any right on the goods. The ownership of goods always remains with the principal. The agent has to only make arrangements for increasing sales.
• Eligible to contract: The appointment of an agent or the existence of agency is the result of the contract. This contract is entered between the agent and the principal.
In simple words: Agents do not gain ownership of goods but facilitate sales for the principal, and their relationship is established through a legally binding contract.

🎯 Exam Tip: When listing characteristics, focus on distinct legal aspects like lack of ownership and the contractual basis of the agency relationship.

Invoice, Mercantile Agents And Account Sale Short Answer Type Questions (4 Marks)

Question 1. What is 'loco invoice'? What are its kinds?
Answer: Loco Invoice: When the seller quotes any price for the goods, the price is for the goods to be delivered at the godown of the seller. The price does not include any expenses which are done by the seller on packing, cartage etc. This kind of invoice is known as loco invoice. Loco Invoice can be of the following three kinds:
• In the Absence of Advance.
• In the case of Advance Payment.
• Advance Payment at will.
In simple words: A loco invoice quotes a price for goods "ex-seller's godown," meaning the price covers only the goods themselves, with the buyer responsible for all additional expenses like packing and transport from that point. It comes in three forms based on advance payment conditions.

🎯 Exam Tip: Define "loco invoice" by its core characteristic (price at seller's godown, excluding onward expenses). Briefly list its kinds to show comprehensive understanding.

Question 2. What do you mean by E O. R. invoice?
Answer: In case of F. O. R. invoice, only these expenses which are incurred by the seller after the loading of the goods in railway wagons would be shown as charges, the rest are included in the F.O.R. price.
In simple words: An F.O.R. (Free On Rail) invoice means the seller bears all costs to load the goods onto railway wagons, and only expenses incurred after this point are separately charged; all prior costs are included in the F.O.R. price.

🎯 Exam Tip: Focus on the point of cost transfer in an F.O.R. invoice-expenses *after* loading onto wagons are separate, but all costs up to and including loading are bundled into the price.

Question 3. What do you mean by chain stores or multiple shops?
Answer: Multiple shapes are the shops established by those producers who want to sell their products in different towns or in different localities of the same town.
In simple words: Chain stores, or multiple shops, are retail outlets owned and operated by a single company, typically a manufacturer, to sell their own products across various locations.

🎯 Exam Tip: Key elements of chain stores are common ownership, standardized operations, and distribution across multiple locations, often by manufacturers themselves.

Question 4. What is a mail-ordered business?
Answer: In a mail-order business, every activity of purchase and sale is done by the post. It is a method of retail sale on a large scale. There is no direct conversation between a buyer and a seller. The buyer places an order of things required by him through the post and the seller despatches the things by the post. In such type of business, there is no need of displaying the goods.
In simple words: Mail-order business involves buying and selling goods primarily through postal services, with customers ordering via mail and receiving products delivered by post, eliminating the need for physical stores or direct interaction.

🎯 Exam Tip: Highlight "post" as the primary medium for all transactions (order and delivery) and the absence of direct buyer-seller interaction or physical display of goods.

Question 5. What do you understand by departmental stores?
Answer: Departmental stores are those institutions of retail trade where different departments dealing in various commodities are situated under the same root and work under the control of one management.
In simple words: Departmental stores are large retail establishments that offer a wide range of goods organized into separate departments, all operating under unified management within a single building.

🎯 Exam Tip: Emphasize the "wide range of commodities," "different departments," and "one management" within a single structure to define a departmental store.

Question 6. What are multiple shops?
Answer: Multiple shops are the shops established by those producers who want to sell their products in different towns or in different localities of the same town. The purpose of this is to keep direct personal contact with the customers by eliminating middlemen.
In simple words: Multiple shops are a network of retail stores owned and managed by a single company, often a producer, aiming to directly sell their products to consumers across various locations to cut out middlemen.

🎯 Exam Tip: Focus on "producer-owned," "different locations," and the objective of "eliminating middlemen" to explain multiple shops.

Question 7. Give any two advantages of mail-order business.
Answer: Two advantages of mail-order are as follows:
• No Bad Debts: All transactions are on a cash basis and thus there is no danger of bad debts.
• Expansion of business: There is a wide scope in the mail order business. The businessman reaches there where goes the post.
In simple words: Mail-order businesses largely avoid bad debts due to cash-on-delivery or advance payment models, and they can expand their reach globally through postal networks.

🎯 Exam Tip: When listing advantages, select distinct benefits like risk reduction (no bad debts) and geographical reach (expansion) that are characteristic of the mail-order model.

Question 8. Write contents of account sale.
Answer: Contents of Account Sale are as follows:
1. Name of the Principal.
2. Name of the ship carrying the goods if the principal lives in a foreign country.
3. Commission Deducted.
4. Advance sent to the principal.
5. Particular of goods sold:
• Quantity of goods sold
• Quality of goods sold
• Price of goods sold along with the rate.
6. Expenses incurred on behalf of the principal in selling the goods.
7. Amount of bill accepted as advance.
8. Amount payable
9. Particulars and mode of the amount remitted.
In simple words: An account sale details the principal's name, specifics of goods sold (quantity, quality, price), expenses incurred, commission deducted, any advances, and the net amount remitted to the principal.

🎯 Exam Tip: Memorize the key categories of information included in an account sale, distinguishing between what the agent sold, spent, earned, and eventually remitted to the principal.

Question 9. Distinguish between factor and broker.
Answer: Difference between factor and broker

🎯 Exam Tip: Focus on two main distinctions: whether the agent takes "possession of goods" and whether they deal "in their own name" or "in the principal's name."

Question 10. Write a short note on Del Credere Commission.
Answer: Del Credere Commission: An agent can sell the goods for cash as well as for credit unless the principal has made specific instructions for cash sales only. There are always possibilities of bad debts in case of credit sales. If the principal wants to save himself from this kind of loss he gives an extra commission to the agent in addition to the simple commission. This extra commission is known as 'Del Credere Commission'. Which ensures the bad debts and the agent pays the number of bad debts if any to the principal. In this way, the principal saves himself from bad debts by giving del credere commission.
In simple words: Del Credere commission is an extra payment given to an agent in exchange for them guaranteeing the payment of credit sales, thereby protecting the principal from losses due to bad debts.

🎯 Exam Tip: When defining Del Credere Commission, clearly link it to "guaranteeing credit sales," "protecting the principal from bad debts," and being an "extra commission" over the basic one.

Question 11. What are the characteristics of retailers?
Answer: The following are the characteristics of retailers:
• Retailers purchase goods from wholesalers and sell them to the ultimate consumers.
• The retailer purchase goods in small quantities from wholesalers and sell them in still smaller quantities to the consumers.
• The retailer has a direct relationship with the consumer.
• Retailers do not specialise in specific product but deal in a variety of goods.
In simple words: Retailers buy goods from wholesalers in smaller quantities and sell them directly to final consumers, often dealing in a wide variety of non-specialized products and maintaining direct customer interaction.

🎯 Exam Tip: Focus on the retailer's position in the distribution channel (selling to ultimate consumers) and their typical inventory practices (small quantities, variety).

Question 12. What are the services of retailers towards wholesalers?
Answer: The facilities and services provided by retail traders to the wholesaler may be enumerated as below:
1. Collection of Necessary Information: Retailers remain in direct touch with consumers so they provide necessary pieces of information regarding fashion, taste and habits of consumers to the wholesaler.
2. Relieves from Retail work: Retailers sell goods in small quantities to consumers and thus they relieve the wholesaler from this burden.
3. Relieves from Local Advertisement: It is the retailer who advertises the product in local markets. The wholesaler need not do this.
4. No Need of keeping contact with the consumers: There is no needier the wholesaler to keep direct contact with the consumer for the purpose of sales. This service is performed by the retailer.
5. Advantages of Increased Sales: Retailers remain in direct and close contact with customers and can induce them to buy more or to buy new products. Due to this, a wholesaler gets the advantage of the increased sale.
In simple words: Retailers benefit wholesalers by providing consumer feedback, handling small-scale sales, undertaking local advertising, connecting with end-users, and ultimately boosting overall sales for the wholesaler.

🎯 Exam Tip: When discussing services, highlight how retailers bridge the gap between wholesalers and consumers, aiding in market information, distribution, and promotion.

Invoice, Mercantile Agents And Account Sale Long Answer Type Questions (8 Marks)

Question 1. Distinguish between Invoice and Account sale. Or What is the meaning of Invoice and Account Sale? Differentiate between these two. Or What is Invoice? Prepare Invoice in a proper form with imaginary figures. Or What is Invoice? Prepare an invoice with the help of imaginary figures. Or What is account sale? Prepare account sale with the help of imaginary information. Or What is the difference between ‘Invoice' and 'Account of Sales'? Prepare an Account of Sales with the help of imaginary figures.
Answer: Invoice: The business transactions between the buyer and seller are accomplished according to the terms and conditions agreed upon by them. The purchaser sends the order to the seller, in which he mentions the quantity he wants to purchase and also states that the terms and conditions are acceptable to him. On receiving the order, the seller sends the acceptances of order in writing. Then the seller starts collecting the goods and gets then packed according to the instructions of the buyer and arranges to send the goods to the buyer either by railways or by any other means of transport.

An invoice is a written document, sent by the seller to the buyer, stating therein the quantity and quality of goods sent, their prices, expenses incurred by him on behalf of the buyer and such other particulars. The buyer is also able to find out from an invoice the total amount he has to pay and the details thereof.

Example of Invoice: Seller: Preeti Bookseller, Kamla Nagar, Kanpur. Buyer: B.N. Baijal and Sons, Wright Town, Jabalpur. Description of Goods: 20 copies of Indian History @ Rs. 24 per copy 50 copies of Modern Maths @ Rs. 20 per copy 30 copies of Advanced Accountancy @ Rs. 35 per copy Expenses Incurred: Packing Rs. 35, Cartage Rs. 10, Loading Rs. 10, Freight Rs. 30, Insurance Rs. 15. Terms and Conditions: Trade Discount 10% 2% Cash discount, if payment is made within one month.

Prepare a proper invoice.

PREETI BOOK-SELLERS
Publishers and Booksellers

Telegram: Preeti
Telephone: 218715, 2685

Kamla Nagar, Kanpur
10 April 5th, 2011

Invoice No. 101
Order No. 7

M/s B.N. Baijal and Sons,
Wright Town,
Jabalpur.
Terms-2% Cash discount if payment is made within one month.

Account Sale: The owner of the goods has a right to sell them. Sometimes the owner appoints some agents to increase the volume of sales. In this way the goods can be sold by (a) The Owner, (b) The Agent.

The owner sends the goods to his agent or agents on certain terms and conditions. The agents sell the merchandise and calculate the amount received from actual sales. He deducts from this amount the expenses incurred by him on behalf of his principle and commission. The balance is remitted to the principal. The agent submits a written statement periodically (generally every month) to his principle specifying the details of goods sold, expenses made and commission deducted.

Difference between Invoice and Account Sale

🎯 Exam Tip: When asked to distinguish between documents, provide a clear definition for each, followed by a comparative table highlighting key differences like sender, receiver, purpose, and content. Practice drawing the invoice format with imaginary figures to score well.

Question 2. What is an Account Sale? How is it different from Statement of Account? Or What is 'Account Sale'? Prepare Account Sale with the help of imaginary figures.
Answer: Account Sale: Sometimes the owner appoints some agent to increase the sale. The owner sends the goods to his agent on certain terms and conditions. The agent sells the merchandise and calculates the number of actual sales which is submitted to the principal at regular intervals. He deducts from this all the expenses incurred by him on behalf of the principal and the balance is remitted to the principal. The statements which the selling agent prepares and submits to his principal is called 'Account Sale'. The account sale gives details and the values of the sales and of expenses incurred by the agent to his principal.

Difference between Statement of Account and Account Sale

🎯 Exam Tip: For differentiation questions, clearly define each document first. Then, use a table to compare them based on critical criteria like purpose, sender/receiver, frequency, and specific information included.

Question 3. What is Loco Invoice? Give a specimen of Loco Invoice with the help of imaginary figures.
Answer: Loco Invoice: When the seller quotes any price for the goods, the price is for the goods to be delivered at the godown of the seller. The price does not include any expenses which are done by the seller on packing, cartage etc. This kind of invoice is known as loco invoice.

Specimen of Loco Invoice: Seller: Preeti Booksellers, Kamla Nagar, Kanpur: Buyer: B.N. Baijal and Sons, Wright Town, Jabalpur Description of Goods: 20 copies of Indian History @Rs. 48 per copy 50 copies of Modern Maths @ Rs. 50 per copy 30 copies of Advanced Accountancy @ Rs. 75 per copy. Expenses Incurred: Packing Rs. 175, Cartage Rs. 165, Loading Rs. 80, Freight Rs. 155, Insurance Rs. 355. Terms and Conditions: Trade Discount 10% 2% Cash discount if payment is made within a month.

PREETI BOOKSELLERS
Publishers and Booksellers

Telegram-Preeti
Telephone-5268510

Kamla Nagar, Kanpur
5th April, 2011

Invoice No. 101
Order No. 7

To,
M/s B. N. Baijal and Sons,
Wright Town,
Jabalpur. (M. P.)
Terms-2% Cash discount if payment is made within a month.

🎯 Exam Tip: When providing an invoice specimen, ensure all key elements like seller/buyer details, goods description, rates, amounts, discounts, expenses, and terms are clearly presented, with calculations accurately shown.

Question 4. Prepare an invoice from the following particulars: Seller: Raju Book Store, Adarsh Nagar, Kanpur Purchaser: Ram Lal and Sons, Katra, Allahabad. Description of transactions: 50 copies - High School Commerce @ Rs. 50 each 50 copies - Intermediate Commerce @ Rs. 100 each. 40 copies - Advance Accountancy @ Rs. 80 each. Expenses incurred: Packing Rs. 200 Carriage Rs. 175 Loading Rs. 80 Insurance Rs. 400 Conditions:
(i) Trade discount @ 10%.
(ii) 2% cash discount is allowed on payment within a month.
Answer:

Invoice

M/s Raju Book Store

Telegram-Book Store
Telephone-2268510

Adarsh Nagar, Kanpur
5th April, 2011

Invoice No. 283
Order No. 420

To,
M/s Ram Lal and Sons,
Katra, Allahabad
Terms-2% Cash discount if payment is made within a month.

🎯 Exam Tip: When preparing an invoice, meticulously list all items, apply trade discounts before adding expenses, clearly show sub-totals, and ensure all terms and conditions are mentioned. Double-check all calculations.

Question 5. M/s Moni and Sons, Kolkata sold the following articles to Soni & Sons of Varanasi: 25 Dozen bed-sheets @ Rs. 12 per bed-sheet 120 Table-clothes @ Rs. 40 per dozen 288 Towels @ Rs. 24 per dozen 24 Big Towels @ Rs. 36 per dozen. Following expenses were incurred by the seller for sending the articles: Packing charges Rs. 10, Carriage Rs. 15, Railway freight Rs. 225, Insurance Rs. 10, \(7\frac{1}{2}\)%, 2 % Trade discount was allowed to purchaser. Assurance was given for allowing 1% cash discount for making payment within a month. Prepare an invoice from the above details.
Answer: Solution:

INVOICE

M/s. Moni & Sons, Kolkata
Distributors and Wholesalers

Telephone: 2230135
Telegraph: Cloth
Kolkata

Kirti Market
Rishi Nagar

Dated: 18th August, 2011

Invioce No. 0420
Order No. 0840

To,
M/s Soni & Sons,
Ganga Nagar,
Varanasi.
Terms: 1% Cash discount if payment is made within a month.

🎯 Exam Tip: Pay close attention to unit conversions (e.g., dozens to individual items) and percentage calculations for discounts and expenses. Ensure accurate placement of all details as per standard invoice format, especially date and specific terms.

Question 6. M/s Ghosh Brother, Kolkata sold the following goods to the firm Modern Cloth House, Lucknow: 25 Dozen Bed-sheet @ Rs. 50 per Bed-sheet 120 Table clothes @ Rs. 240 per dozen 288 Towels @ Rs. 120 per dozen 20 Big Towels @ Rs. 360 per dozen Seller made the following expenses in sending the goods: Packing expenses Rs. 50 Carriage Rs. 55 Railway Freight Rs. 50 Insurance Rs. 30 Trade discount given to buyer were \(7\frac{1}{2}\)% and 1% cash discount if payment is made within a month. Prepare an invoice.
Answer: Solution:

INVOICE

M/s Ghosh Brother
(General Merchants)

Telephone: 2284961
Invoice No.: 426/16

Harisson Road,
Kolkata
Jan. 15, 2011

To,
M/s Modern Cloth House,
Lucknow.
Terms: 1% cash discount, if payment is made within a month.

🎯 Exam Tip: Pay close attention to the details of quantity (dozens vs. individual items) and rates when preparing invoices. Ensure that trade discounts are applied to the total value of goods *before* adding expenses, and cash discount terms are clearly stated but not calculated in the final amount unless payment is made.

Question 7. What is Sales Statement? What are the differences between Invoice and Sales Statement? Prepare Sales Statement on the basis of imaginary information. Mumbai sold following goods to M/s Raj Traders, Allahabad: 200 Plastic Buckets 20 Litre @ Rs. 40 each; 100 Plastic Tubs 30 litre @ Rs. 60 each; 100 Plastic Trey @ Rs. 30 each 8" × 15". 10% Trade Discount is allowed to the purchaser and 2% cash discount if payment is made within a week. Prepare invoice in the right format from the above particulars.
Answer: Solution:

Invoice M/s Plastico Ltd.

Mumbai Date: 30 March, 2010

To, M/s Raj Traders, Allahabad
Condition: 2% Cash discount will be given on payment in 1 week.

🎯 Exam Tip: When differentiating, explain that a sales statement focuses on a summary over time, while an invoice is for a single transaction. For preparing an invoice, clearly list all items, calculate trade discounts on the gross amount, and state cash discount terms without applying them to the final total.

Question 8. M/s Badruddin & Sons, Aminabad, Lucknow sold the following goods on behalf of M/s Karuna Brothers, Mahatma Gandhi Marg, Kanpur on January 5, 2013: 100 Silk Sarees @ Rs. 500 per Saree 100 Cotton Sarees @ Rs. 200 per Saree 500 Metre Shirting @Rs. 80 per metre 100 Dhoti Mardani @ Rs. 150 per Dhoti Freight Rs. 2,100, Cartage Rs. 150; Packing Rs. 250; Other expenses Rs. 150 and Commission @ 15%. Prepare Account Sale from the above information.
Answer:

M/s. Badrudding & Sons
(Commission Agent)

Telephone: 2213368
Telegram: Neeraj

Aminabad
Dated: 5th Jan. 2013

Account Sales of goods recieved from and sold on behalf of M/s. Karuna Brothers, Mahatma Gandhi Marg, Kanpur :

Account Sale No. 315
Term ....

🎯 Exam Tip: When preparing an Account Sale, ensure you start with the total sales value, then sequentially deduct all expenses *and* commission. Remember that commission is usually calculated on the gross sales value unless otherwise specified. Clearly show the net amount remitted.