Discussion board The customer and vendor sections of the app

Discussion board

The customer and vendor sections of the application are very similar, discuss some of the similarities and differences and how they interact with each other. Unit 3 Forum 1

Solution

In an accounting software, we often get to see both the customer and the vendor section and they appear to be very similar in nature. Because customers sections deal with when the company sells goods to other parties on credit and maintains that account/s and vendor section focuses on the company purchasing materials on credit from the outside parties and maintains their accounts.

Similarities between these two accounts are found in terms of their format of presentation and the following reports therefrom. Both contain the party’s name to which the goods are sold to and/or purchased from, VAT no. of both the sellers and purchasers, nature of the goods sold or purchased, quantity, rate & value of the goods purchased or sold etc.

The points of difference lie in the tax calculation. At the time of purchase input tax credit is computed and output tax credit is computed at the time of sale. Purchase is dependent upon the purchase order placed from the raw materials requisition department whilst sale is accompanied by the purchase order placed by the customer.