Understanding Business Documents, Trade, and Capitalism
The accounting industry relies on technical studies of all documents involved in a business. Business papers are a written record of trade agreements, describing business operations and reducing future discrepancies among stakeholders.
Accountants use business papers to conduct necessary accounting entries and obtain accurate data results.
Commercial documentation is important because it provides evidence of business transactions, allowing for accurate accounting and establishing ownership of goods or services. It also serves as evidence in disputes.
Internal Documents
- Revenue receipts and expenditures
- Value of input and output
- Collection sheets
- Proforma invoices
- Stock control cards
- Order notes
Bank Documents
- Current Account Cheques
- Savings Account documents
- Deposit slips
- Withdrawal slips (for Current Accounts)
- Letters of credit
Proof of Payment
- Bills
- Receipts
- Sales Slips
- Settlement of purchase tickets or tapes issued by cash registers
- Credit and Debit Notes
- Sender Reference Guides
- Withholding Airline tickets
Securities
- Bills of exchange
- Promissory Notes
- Warrants
- Checks
Trade: Buying and Selling
Trade is a socio-economic activity involving the buying and selling of goods for use, sale, or processing, receiving a desired value in exchange for something else of equal value.
Classes of Trade
By Means of Transportation:
- Land
- Water
- Air
By Area:
- Local
- Regional
- National
- International
By Volume:
- Wholesale
- Retail
By Method of Payment:
- Cash
- Credit
Wholesale trade involves buying and selling goods where the buyer is not the final consumer but intends to sell to another dealer or use the goods as feedstock for manufacturing. Retail trade involves buying and selling goods where the buyer is the ultimate consumer. Internal trade occurs within the same country, while foreign trade takes place between people in different countries. Trade by land, sea, air, and river refers to the method of transporting goods.
Capitalism: An Economic System
Capitalism is an economic system that emerged in Europe in the eighteenth and nineteenth centuries, based on the establishment of organizations for the purchase, production, and sale of goods and services in a market free from state control. It is based on the law of supply and demand. The concept of “surplus value” (unpaid labor appropriated by the capitalist) led to reactions against capitalism, such as trade unionism, communism, and anarchism.