Accounting – 2.2 Business documents | e-Consult

Invoice: An invoice is a document issued by a seller to a buyer, detailing the goods or services supplied, the quantity, the price per unit, and the total amount due. The invoice from the supplier would show the office supplies, the quantity, the price, and the total of £150.

Payment: The company paid the invoice in full, likely by cheque or bank transfer. This reduces the company's liability to the supplier.

Credit Note: The supplier would issue a credit note for £150 to the company. This reduces the amount the company owes to the supplier. It essentially acts as a refund or adjustment to the original invoice.

Difference between Receipt and Invoice: An invoice is issued before payment and requests payment. A receipt is issued after payment and serves as proof of payment. It confirms that the payment has been received.