3.6

MEMOS

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3.6 MEMOS

Cash Transactions Credit Transactions Other

Cash receipt

Cheque butt

Sales invoice

Purchase

invoice

Memo

Statement of

account

Order

Quote

© Michael Allison. Author’s permission required for external use.

Memos

Used for internal t ransact ions – transactions which do not involve another

business or individual entity. Examples:

Capital contributions of non-cash items, e.g. the owner contributing a vehicle

Drawings of non-cash items, e.g. the owner taking a pair of shoes out of the

firm’s stock as a gift for a friend

Theft of stock – the stock is never sold so there is no transactions with another

party

3.6 MEMOS

Business

Owner

© Michael Allison. Author’s permission required for external use.

Memos

Format of a memorandum or memo

TGS Clothing Supplies Date: 15/1/2015

Memo 346

Details: Withdrawal of one stock unit

Cost price: $250

Signed: G. Billings

3.6 MEMOS

Name of business

Details of

transaction

Date of

transaction

Memo #

© Michael Allison. Author’s permission required for external use.

Memos

Memos ensure reliability – provides evidence of an internal transaction

Reliability:

Information is reliable if it:

• Is free from error, bias, personal opinions and estimates

• Is based on data that can be checked or verified

• Has a source document to verify it

3.6 MEMOS

© Michael Allison. Author’s permission required for external use.

TASK

In-class Homework

Ex3.6 X