Do You Know Your Business Terms? Part 1

Test your knowledge of common business/accounting terms.

Terms

1. Sales Order

2. RMA Form

3. Credit Insurance

4. Hold Order

5. Bill of Lading

6. Drop Ship

7. Pick List/Picking Ticket/ Pick Ticket

8. Packing Slip

9. Credit Memo

10. Purchase Order

Meanings

A. A guarantee by a third party against non-payment of an invoice by a customer. 

B. A document that a customer submits to the receiving company in which it authorizes the purchase of specific items or services from the receiving company. It states the quantity and price that the customer is willing to pay and where the products are to be sent to.

C. A legal document between the shipper of goods and the carrier of goods. It describes the type, quantity, and destination of the goods.

D. A form to translate a customer order into a standardized format for internal use by a business. The form should always be assigned a unique identification number so it can be tracked, as well as, a place for the sales persons name if there are commissions associated with it..

E. A document listing all items to be picked from stock in order to fulfill a customer order.

F. A document issued by the seller of goods/services to the buyer, reducing the amount that the buyer owes under the terms of an earlier invoice. It maybe issued because the buyer returned goods or there is a pricing dispute, or some other reason the seller agreed to.

G. A authorization document issued by the order entry staff and use by the receiving department to accept back goods originally shipped to a customer.

H. The practice of having suppliers ship directly to a company's customers, by passing the company itself.

I. If there is a sales order from an existing customer with an unpaid and unresolved invoice more than a certain amount predetermined by the company, the credit department places a hold on that sales order. When that happens the customer should be informed that the order will be kept on hold until the outstanding invoice is paid.

J. An itemization of the goods included in a shipment. This typically includes the description, part number, and quantity of each item. It is prepared by the shipper and is attached to the outside of the shipping container. It is used by the recipient to verify the contents of the shipment.

Answers: 1(D)  2(G)  3(A)  4(I)  5(C)  6(H)  7(E)  8(J)  9(F)  10(B)