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discount, etc. It is also called a Bill or Memo. Buyer gets information all about the amount he has to pay
to the seller from Invoice only.
2. Pro-Forma Invoice – The statement (or forwarding letter) containing the details of goods consigned
from consigner to consignee is known as aPro-forma Invoice. It gives the particulars as regards quantity,
quality, price and expenses incurred on the goods consigned. In case of consignment, consignee is an
agent of consigner who is supposed to sell goods on behalf of consigner and this statement/proforma
invoice is only for his information. It is also known as interim invoice.
3. Debit Note – It refers to a letter or note which is sent by the buyer to the seller stating that his
(seller’s) account has been debited by the amount mentioned in note on account of goods returned
herewith. It states the quantity, rate, value and the reasons for the return of goods.
4. Credit Note – It refers to a letter or note which is sent by the seller to the buyer stating that his
account has been credited by the mentioned amount on account of acceptance of his claim about the
goods returned by him.
5. Lorry Receipt – It refers to a receipt issued by the Transport Company for goods accepted by it for
sending from one place to another. It is also known as Transport Receipt (TR) and Bilty.
6. Railway Receipt – It refers to a receipt issued by the Railways for goods accepted for sending from one
station to another.

Terms of Trade

The following are the main terms used in the trade.
1. Cash on delivery (COD): It refers to a type of transaction in which payment for goods or services is
made at the time of delivery. If the buyer is unable to make payment when the goods or services are
delivered, then it will be returned to the seller.
2. Free on Board or Free on Rail (FoB or FOR): It refers to a contract between the seller and the buyer in
which all the expenses up to the point of delivery to a carrier (it may be a ship, rail, lorry, etc.) are to be
borne by seller.
3. Cost, Insurance and Freight (CFF): It is the price of goods which includes not only the cost of goods but
also the insurance and freight charges payable on goods up to destination port.
4 E&OE (Errors and Omissions Excepted): It refers to that term which is used in trade documents to say
that mistakes and things that have been forgotten should be taken into account. This term is used in an
attempt to reduce legal liability for incorrect or incomplete information supplied in a document such as
price list, invoice, cash memo, quotation etc.