Question

Difficulty: MediumCommercial Documents in Home Trade

Match each commercial document used in home trade with its appropriate functional description.

  • Letter of InquirySent by a prospective buyer to request details regarding goods availability, prices, and trade terms
  • OrderIssued by a buyer to formally request the supply of specified goods and quantities
  • Proforma InvoiceIssued by a seller as a preliminary bill demanding payment before goods are dispatched
  • Statement of AccountSent periodically by a seller to summarize all sales, receipts, and outstanding account balances

Answer

The Letter of Inquiry matches the document sent by a prospective buyer asking for price and availability details; the Order matches the buyer's formal document requesting goods supply; the Proforma Invoice matches the preliminary bill demanding payment prior to dispatch; and the Statement of Account matches the periodic document summarizing transactions and net balances.
Each commercial document aligns directly with its primary function in home trade operations: inquiring about goods, placing an order, requesting advance payment via proforma invoice, and summarizing financial balances through a statement of account.

Step-by-Step Solution

1
Identify the document used at the preliminary stage of home trade inquiry.
The Letter of Inquiry is paired with requesting details on prices, stock availability, and trade terms.
It initiates the buying process before any transaction occurs.
2
Identify the document that places the order.
The Order is paired with issuing a formal request to supply specified goods.
It indicates the buyer's firm commitment to purchase.
3
Identify the document used for advance payment request.
The Proforma Invoice is paired with a preliminary bill demanding payment before dispatch.
Sellers issue it when credit is not extended or pre-payment is required.
4
Identify the periodic accounting document.
The Statement of Account is paired with summarizing sales, receipts, and balances over a period.
It informs credit customers of their ongoing financial balance.

Key Concept

Functions of Commercial Documents in Home Trade
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