Explain the term Cash Sales, Credit Sales, Purchases for cash and Purchases on Credit

January 25th, 2011 Comments off
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Cash Sales:

If the sale is for cash, it occurs when the goods or services are given in exchange for an immediate payment whether in term of notes, coins, cheque or credit card

Credit Sales:

If the sale is on credit, the business will issue sales invoices for the goods or services supplied showing details of the goods or services supplied, the amount of money owed by the customer and the TERMS OF PAYMENT eg: payment requested within seven days or within 30 days,etc)

Purchases for cash:

If the goods  are paid for immediately namely in cash the purchase occurs when the goods and cash exchange hand

Purchases on credit:

If the goods  are bought on credit, the purchase normally occurs when the business receives the goods and invoice from the supplier.

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Financial Accounting

 
 

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