What document records the itemized bill of goods sold or services provided?

What document records the itemized bill of goods sold or services provided?

• A. Transaction journal
• B. Invoice
• C. Accounts payable
• D. Accounts receivable

Answer: (B)

An invoice is the document that records the itemized bill of goods sold or services provided. It is issued by the seller to the buyer and requests payment, detailing each item or service, its quantity, unit price, any taxes or discounts, and the total amount due. An invoice also typically includes important payment terms, due date, and identifiers like an invoice number, date, and parties involved. In the seller’s books, the invoice supports recognizing accounts receivable, while in the buyer’s books it supports accounts payable.

The transaction journal, by contrast, is a chronological record of all financial transactions posted to the accounting system and isn’t specifically the itemized bill itself. Accounts payable refers to the liability representing what the buyer owes, and accounts receivable refers to the asset representing what the seller is expected to collect.