Section IV LEGAL ASPECTS OF BUSINESS Flashcards

The exchange of goods and services between a buyer and a seller for monetary payment.

Cash
Credit

A cash transaction is the
exchange of goods and services between buyers and sellers for immediate payment

Exchange of goods and services between buyers and sellers that involves delayed payment or payment at a later date.

Record of the transaction

both the buyer and seller keep their finances in order.

Provide evidence of legal ownership of items purchased.

1.Letter of enquiry
2.Covering letter
3.Catalogue
4.Price List
5.Order Note
6.Delivery Note
7.Invoice
8.Pro Forma Invoice
9.Credit Note
10.Debit Note
11.Statement Of Account
12.Receipt

1.Foreign Order
2.Pro Forma Invoice
3.Import and Export Licenses
4.Certificate Of Origin
5.Shipping Note
6.Bill Of Lading
7.Airway Bill
8.Certificate of Insurance

• the amount of the payment
• the urgency of the payment
• whether payment is to be made at home or abroad
• safety of the chosen method

note instructing a financial institution to pay a sum of money from an account the buyer has a that institution.

Amount to be paid

Date cheque was written

Payee’s name ( person receiving payment)

Drawee’s name (institution honoring payment)

Open- no amount written on the cheque.

Bounced/dud/rubber/dishonest: a sum written on it that is greater than the amount of money
in the drawer’s account.

Post dated: a cheque dated for payment in the future.

Ante-dated: one that has a date more than six months past

e. Stale-dated: one that has a date more than six months past.

f. Crossed: one that has two parallel trans versed lines drawn across its front. Such
cheques
have too be deposited until they can be verified.

h. Managers Cheque : a cheque which has to be signed by the bank manager
allowing it to
be paid because of the large sum.

Cash – Notes and coins, mostly used in local trade with local currency.

Credit Transfer – Bank-to-bank transfer, no physical cash involved.

Standing Order – Regular payments taken from a customer’s account automatically.

Postal Order – Small payments via post office, mainly in foreign trade.

Bank Draft – Prepaid cheque from a bank used for local or foreign payments.

Money Order – Like a bank draft, but payee’s name isn’t shown.

Telegraphic Transfer – Fastest method, money sent electronically.

Letter of Credit – Bank document showing a buyer has enough funds to pay.

Documentary Letter of Credit – A bank agrees to pay for goods on behalf of a customer.

Bill of Exchange – A written promise (I.O.U) from a buyer to pay a seller later.

to provide a sum of money in compensation for any damages suffered as a result of a risk that would have occurred.

Events an insurance company is willing to provide coverage for as the probability of them happening can be predicted because of available data,

The sum of money the insured would be
required to pay monthly to maintain the insurance