Question 4
Explain the following business documents and state two uses of each:
- Consignment note;
- Delivery note;
- Bill of lading;
- Bill of sight.
Observation
Few candidates attempted this question and performance was very poor.
The expected responses to the question include:
(a) Consignment Note:
It is a contract of carriage of goods between the carrier and the seller in home trade.
Uses:
(i) It is used when goods are sent on sale or return basis to an agent;
(ii) It is used when goods are sent by other means other than the sellers vehicles;
(iii) It gives details of the goods and the consignee;
(iv) It states whether freight has been paid or not;
(v) It is used as an evidence of delivery of goods.
(b) Delivery Note:
It is a document sent by the seller to the buyer to acknowledge the receipt
of goods sent.
Uses:
(i) It contains description of the goods, the address to which it is sent
without price;
(ii) Its purpose is to allow the buyer to check the details of the goods on arrival;
(iii) It is used as evidence of goods delivered before invoices are issued in credit sales;
(iv) It is used when goods are transported by the seller’s vehicles.
(c) Bill of Lading:
It is a contract of carriage of goods between an exporter and the ship owner.
Uses:
- This is a document used in the shipping of goods;
- It serves as evidence of contract of carriage;
- It is the document of title to the goods which enables importers to clear goods at the port;
- It gives the details of the goods and their destination;
- It serves as an acknowledgement of the goods by the ship owner.
(d) Bills of Sight:
It is a document prepared by the importer stating the details of the goods pending the arrival of bill of lading.
Uses:
(i) This is used pending the arrival of the bill of lading that contains details of goods;
(ii) It contains details of the cargo to allow the importer to inspect the goods on arrival;
(iii) It is used to calculate custom duties.