Q5-7RQ - Horngren'S Financial And Managerial Accounting

Question

What is an invoice?

Step-by-Step Solution

Answer

An invoice refers to a bill containing the description of the quantity and price of the goods purchased from a business concern. 

Meaning of Commercial Documents

Commercial documents denote the written documents containing the records of commercial transactions such as selling and purchasing goods and services. The receiver of such documents signs the duplicate copy and returns the same to the maker. 

Meaning of an invoice

An invoice is a commercial document prepared by the seller of the goods in favor of the buyer. It contains the following details:

• Name and address of the buyer,
• Name and address of the seller,
• Price and quantity of the goods,
• Payment terms,
• Contact details of both the parties,
• Date of invoice preparation, and many more.