Invoice Calculations
An invoice is a business document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. This bill indicates that the seller has provided a specific product category, with specific quantity and at a price to the buyers. An invoice is considered very important because it shows that a transaction has been made between the buyers and the seller. It is issued to the buyer without any extra charge and if the post sale issues arises then invoice is considered as a major proof of transaction. The receipts given by the sellers on the retail outlets are examples of invoices. Therefore, an invoice is the proof of the transaction.
Features on an invoice
Total Cost
Total cost is the sum total price for a number of items = cost per unit x units produced or Total cost = cost per unit x units sold (quantity)
Quantity is the amount of an item purchased or received
Description is a brief explanation of the item
A unit is a single item
Unit price is the cost for one item before tax
Amount is the cost for the amount of items bought multiplied by the unit price
Tax
Tax is a fee charged ("levied") by a government on a product, income or activity. Tax is added to the price of an item. Governments charge G.C.T to assist with the running of the country (infrastructure, lighting and water)
Types of tax
Exercises # 1:
You buy a box drink for $20 and pay 16.5 % in tax (G.C.T). How much is tax?
Tax = $20 times 16.5% = 20 x 16.5/100
Tax = $3.30
The cost with tax is $20 + $3.30 = $23.30 (Total)
Exercises # 2:
You buy a biscuit for $40 and pay a tax. How much is tax?
Tax = $40 times 16.5/100
Tax = $6.60
The cost with tax is $40 + $6.60 = $46.60
Discount
A reduction in the cost of an item. There are several types of discounts:
Exercise #3:
Sarah Jones is a new student at Old Harbour High school. She got most of her supplies for school but still needed a few more items and decided to buy them at her school’s stationery center. Sarah bought:
6 pencils for $10 each
4 Sharpener for $5 each
3 Hardcover note books for $90 and
1/4 dozen pens for $30
Sarah received a 10% discount on all items and paid G.C.T. Complete the invoice with the relevant information and calculate how much money Sarah paid.
Features on an invoice
- A unique reference number (in case of correspondence about the invoice)
- Date of the invoice.
- Name and contact details of the seller
- Name and contact details of the buyer
- Date that the product was sent or delivered
- Description of the product(s)
- Unit price(s) of the product(s) (if relevant)
Total Cost
Total cost is the sum total price for a number of items = cost per unit x units produced or Total cost = cost per unit x units sold (quantity)
Quantity is the amount of an item purchased or received
Description is a brief explanation of the item
A unit is a single item
Unit price is the cost for one item before tax
Amount is the cost for the amount of items bought multiplied by the unit price
Tax
Tax is a fee charged ("levied") by a government on a product, income or activity. Tax is added to the price of an item. Governments charge G.C.T to assist with the running of the country (infrastructure, lighting and water)
Types of tax
- G.C.T.- General Consumption Tax is a tax on consumption and is included in the final price the consumer pays for goods and services whether imported or bought locally. G.C.T. This is a tax charged by the government on items excluding basic food items such as: bread and sugar etc. As well as sanitary napkins. The money collected from G.C.T. is used to run the country, help repay debts (what the country owes), build infrastructure such as lighting, water and roads.
- NIS- National Insurance Scheme
- N.H.T-National Housing Trust
- Education Tax
Exercises # 1:
You buy a box drink for $20 and pay 16.5 % in tax (G.C.T). How much is tax?
Tax = $20 times 16.5% = 20 x 16.5/100
Tax = $3.30
The cost with tax is $20 + $3.30 = $23.30 (Total)
Exercises # 2:
You buy a biscuit for $40 and pay a tax. How much is tax?
Tax = $40 times 16.5/100
Tax = $6.60
The cost with tax is $40 + $6.60 = $46.60
Discount
A reduction in the cost of an item. There are several types of discounts:
- Sales/ Cash Discount
- Percentage Discount
- Trade Discount
Exercise #3:
Sarah Jones is a new student at Old Harbour High school. She got most of her supplies for school but still needed a few more items and decided to buy them at her school’s stationery center. Sarah bought:
6 pencils for $10 each
4 Sharpener for $5 each
3 Hardcover note books for $90 and
1/4 dozen pens for $30
Sarah received a 10% discount on all items and paid G.C.T. Complete the invoice with the relevant information and calculate how much money Sarah paid.