Topic 3 of 7 · Form 3
Consumer protection and documents of trade
Reasons (complex products, misleading advertising, unsafe goods, weights and measures); methods: legislation (fair trading, sale of goods, trade descriptions, food safety), government agencies, consumer associations, trade associations' codes of practice, the media.
Notes for this topic 1 file, in order
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Consumer protection
Reasons (complex products, misleading advertising, unsafe goods, weights and measures); methods: legislation (fair trading, sale of goods, trade descriptions, food safety), government agencies, consumer associations, trade associations' codes of practice, the media.
Documents used in trade
Enquiry, quotation/price list/catalogue, order, advice note, delivery note, invoice, debit note, credit note, statement of account, receipt.
Terms of trade
Trade discount (for trade customers and bulk orders), cash discount (for prompt payment); terms: CWO (cash with order), COD (cash on delivery), E&OE (errors and omissions excepted), carriage paid and carriage forward.
Worked example: Goods listed at US$1 000 have 20% trade discount and 5% cash discount if paid within 14 days. Find the invoice amount and the amount paid within 14 days.
Invoice = 1 000 × 0.80 = US$800; paid = 800 × 0.95 = US$760
Methods of payment
Cash, cheques, bank transfers, standing orders, direct debits, debit and credit cards, mobile money and online payments.
Check yourself
- Which document shows what a buyer owes at the end of the month?
- What does COD mean?
- Give one advantage of a direct debit for a business receiving regular payments.
Show answers
- The statement of account.
- Cash on delivery.
- Payments are collected automatically on time, improving cash flow and reducing collection costs.
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