## **Learning Outcomes**

After completing this article, you will be able to explain the functions and key features of delivery notes, goods received notes, and statements in business documentation. You will know when and why each document is used, their importance in internal control, and how they are checked and recorded for exam-relevant scenarios.

## **ACCA Recording Financial Transactions (FA1) Syllabus**

For ACCA Recording Financial Transactions (FA1), you are required to understand the different business documents involved in purchase and sales transactions, and how these underpin accurate accounting records. This article helps you prepare for related exam questions by focusing on:

- The role and content of delivery notes, goods received notes, and statements
- The process of checking and matching supporting documents for purchases and sales
- The control and audit functions of these documents in financial recordkeeping

## **Test Your Knowledge**

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision._

1. Which business document is used by the customer to confirm the actual quantity and condition of items received?
2. What information is typically recorded in a goods received note?
3. Why do suppliers send monthly statements of account to their customers?
4. True or false? The delivery note always includes prices and payment terms.

## **Introduction**

Well-organised business records rely on systematic use of supporting documents at every stage of a transaction. Three essential documents are the delivery note, the goods received note, and the statement. Each serves a specific control and verification function. Knowing their role, content, and how they fit into the accounting system is essential for accurate recording and for meeting ACCA exam requirements.

## Delivery Notes

A **delivery note** is a document sent with goods delivered to a buyer. It lists what has been delivered so the recipient can check the quantity and identify any missing or incorrect items. This document typically needs to be signed by the buyer upon receipt.

> **Key Term: Delivery Note**
> A document provided by a supplier to the customer detailing goods delivered, used to confirm receipt and condition of items.

It is important to understand that the delivery note:

- Lists each item or product, usually with a unique code and description
- States the quantities sent
- May include an area for the recipient to sign acknowledging receipt
- Does not typically show prices or payment terms

Upon receipt, the delivery note is checked against the original purchase order so discrepancies can be identified immediately. One copy remains with the customer, while another is returned to the supplier as proof of delivery.

## Goods Received Notes

A **goods received note** (GRN) is an internal document created by the buyer after inspecting goods received. The GRN formally records what items have been received and in what condition, regardless of what the delivery note states.

> **Key Term: Goods Received Note**
> An internal record made by the buyer to confirm and document the quantity and quality of goods actually received.

A GRN serves several purposes in the accounting process:

- Forms evidence for what should be paid for (prevents overpayment for undelivered goods)
- Quotes item numbers, descriptions, quantities received, condition, and delivery date
- Provides the basis for checking supplier invoices against what was actually accepted
- Offers strong control over stock and asset movements

### **Worked Example 1.1**

**A purchasing clerk receives a delivery of 30 printers from a supplier. The delivery note lists 30 printers. After inspecting the delivery, only 28 are present and 2 boxes are damaged. What should the clerk do next?**

> **Answer:**
>
> The clerk should note the differences and damaged items directly on the delivery note before signing it and then complete a goods received note recording 28 printers received in good condition and 2 received as damaged. This ensures only the correct quantity and undamaged items are processed for payment.

## Statements

Goods and services supplied on credit are invoiced, but the trading relationship is usually ongoing and can involve multiple invoices, payments, and credit notes within a period. The **statement** (often called a statement of account) is a summary sent by a supplier to a customer, usually monthly, showing all outstanding transactions.

> **Key Term: Statement of Account**
> A listing sent by a supplier to a customer summarising all invoices, credit notes, payments, and the current balance due over a period.

A statement includes:

- Opening balance at the start of the period
- All invoices issued during the period
- All credit notes issued
- All payments received from the customer
- Calculated balance outstanding as of the date of the statement

This acts as a reconciliation tool for both the customer and supplier to agree what is owed, to resolve disputes, and to avoid errors in payment.

### **Worked Example 1.2**

**A supplier sends a statement to a customer showing an opening balance of \$1,000, an invoice for \$400, a credit note for \$50, and records a payment received of \$600. What is the closing balance on the statement?**

> **Answer:**
>
> Closing balance = \$1,000 (opening) + \$400 (invoice) - \$50 (credit note) - \$600 (payment) = \$750 owed.

## Matching and Control Procedures

These documents are used together as a primary control system. Before a payment is made, the accounts department typically checks that:

- The goods received note matches the quantities delivered (from the delivery note)
- The sales invoice from the supplier matches both the GRN and the purchase order
- Any discrepancies are resolved before payment is authorised

### **Worked Example 1.3**

**An invoice is received for 100 desk chairs. The delivery note recorded 100 delivered but the goods received note states only 95 undamaged chairs were accepted, with 5 damaged and rejected. How much should be processed for payment?**

> **Answer:**
>
> Only 95 undamaged chairs should be paid for. The accounts department would query the invoice with the supplier, who should issue a credit note for the 5 rejected items.

### **Exam Warning**

> Always match the supplier’s invoice against the goods received note, not just the delivery note. In the exam, do not assume all items delivered were accepted.

## **Summary**

Delivery notes, goods received notes, and statements each play a specific role in confirming, tracking, and agreeing business transactions. Robust controls and checks using these documents help prevent mistakes, identify shortages or damaged goods, and support accurate, dispute-free payments.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- The purpose and key contents of a delivery note
- How and why a goods received note (GRN) is created and used
- The structure and control function of supplier statements of account
- The process for checking delivered items and matching documents before payment
- The use of these documents as part of internal control and dispute resolution

## **Key Terms and Concepts**

- Delivery Note
- Goods Received Note
- Statement of Account


Business documents and records - Delivery notes, goods received notes, and statements