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Cash Memo is a
- a)source of document prepared by the buyer of the goods for credit
- b)source of document prepared by the seller of the goods for cash
- c)source of document prepared by the seller of the goods for credit
- d)source of document prepared by the seller of the goods for cash and credit
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Cash Memo is aa)source of document prepared by the buyer of the goods ...
Cash Memo is a source of document prepared by the seller of the goods for cash.
Therefore, the correct answer is B: source of document prepared by the seller of the goods for cash.
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Explanation:
- Definition: A cash memo is a commercial document prepared by the seller of goods at the time of sale to the buyer. It is a proof of the transaction and contains details of the goods sold, their quantity, price, and the total amount payable by the buyer.
- Prepared by the seller: The cash memo is generated by the seller of the goods, not the buyer.
- For cash payment: The primary purpose of a cash memo is to record a sale made for cash payments. It is used when the buyer pays the seller immediately, in cash.
- Details included: A cash memo typically includes information such as the seller's name, address, contact details, date of sale, a description of the goods sold, their quantities, unit prices, total amount payable, and any applicable taxes or discounts.
- Legal validity: Cash memos serve as legally valid documents and are used for accounting purposes by the seller. They provide proof of the sale and can be used for future reference or in case of any disputes or returns.
Therefore, the correct answer is B: source of document prepared by the seller of the goods for cash.
Most Upvoted Answer
Cash Memo is aa)source of document prepared by the buyer of the goods ...
Understanding Cash Memo
A Cash Memo is a crucial document in the realm of commerce, particularly in transactions involving cash sales. Here's an in-depth look at its significance:
Definition of Cash Memo
- A Cash Memo is a source document prepared by the seller of the goods when the transaction is executed on a cash basis.
Key Characteristics
- Prepared by the Seller: The seller generates the Cash Memo, indicating that it serves as proof of the goods sold.
- Cash Transactions Only: It is specifically used for transactions where payment is made in cash, distinguishing it from credit sales.
Purpose of Cash Memo
- Proof of Purchase: The Cash Memo serves as a receipt for the buyer, confirming that the transaction was completed and payment was received.
- Record Keeping: For the seller, it acts as an essential record for accounting, helping to track sales and manage inventory.
Distinction from Other Documents
- Unlike an invoice, which is issued for credit sales, a Cash Memo does not involve any credit terms, making it a straightforward cash transaction document.
- It is different from a credit note or a debit note, which are used in transactions that allow for credit.
In summary, the correct answer is option 'B' because a Cash Memo is indeed a document prepared by the seller of goods specifically for cash transactions, providing essential proof of sale and supporting financial record-keeping.
A Cash Memo is a crucial document in the realm of commerce, particularly in transactions involving cash sales. Here's an in-depth look at its significance:
Definition of Cash Memo
- A Cash Memo is a source document prepared by the seller of the goods when the transaction is executed on a cash basis.
Key Characteristics
- Prepared by the Seller: The seller generates the Cash Memo, indicating that it serves as proof of the goods sold.
- Cash Transactions Only: It is specifically used for transactions where payment is made in cash, distinguishing it from credit sales.
Purpose of Cash Memo
- Proof of Purchase: The Cash Memo serves as a receipt for the buyer, confirming that the transaction was completed and payment was received.
- Record Keeping: For the seller, it acts as an essential record for accounting, helping to track sales and manage inventory.
Distinction from Other Documents
- Unlike an invoice, which is issued for credit sales, a Cash Memo does not involve any credit terms, making it a straightforward cash transaction document.
- It is different from a credit note or a debit note, which are used in transactions that allow for credit.
In summary, the correct answer is option 'B' because a Cash Memo is indeed a document prepared by the seller of goods specifically for cash transactions, providing essential proof of sale and supporting financial record-keeping.
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Community Answer
Cash Memo is aa)source of document prepared by the buyer of the goods ...
Cash Memo is a source of document prepared by the seller of the goods for cash.
A Cash Memo is a document that is issued by a seller to a buyer when goods or services are sold for cash. It serves as a receipt for the transaction, and it includes information about the goods or services that were sold, the price paid, and any applicable taxes or other charges.
Cash Memos are typically used in retail and other consumer-facing businesses, where goods or services are sold directly to the end user. They are often used in place of traditional invoices or receipts, as they are simpler and more convenient for the seller to prepare, and they do not require the buyer to have an account or credit arrangement with the seller.
In contrast, a source of document prepared by the seller of the goods for credit would typically be an invoice, which is a more formal document that is issued when goods or services are sold on credit. An invoice includes similar information to a Cash Memo, but it also includes terms and conditions for payment, such as the due date and any applicable finance charges or interest.
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Cash Memo is aa)source of document prepared by the buyer of the goods for creditb)source of document prepared by the seller of the goods for cashc)source of document prepared by the seller of the goods for creditd)source of document prepared by the seller of the goods for cash and creditCorrect answer is option 'B'. Can you explain this answer?
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