Which source of document is prepared by the seller of the goods on credit?a)Invoiceb)Cash memoc)Cash Invoiced)NoneCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

Invoice is the business document which is prepared by the seller when he sells goods on credit. It is the evidence of business transaction being takes place. It is the source document.

Answer

Invoice is the business document which is prepared by the seller when he sells goods on credit...... it is the evidence of business transaction being takes place .... it is the source document

Answer

A is the correct answer.

Answer

Invoice
An invoice is a document that is prepared by the seller of goods on credit. It is a source document that provides a detailed record of the transaction between the seller and the buyer. The invoice includes important information such as the quantity, description, and price of the goods sold, as well as any applicable taxes, discounts, and terms of payment.

Importance of an Invoice
The invoice serves several important purposes for both the seller and the buyer:

1. Legal Documentation: An invoice is a legally binding document that provides proof of the transaction. It helps to establish the terms of the sale and serves as evidence in case of any disputes or legal issues.

2. Record-Keeping: An invoice is an essential record-keeping tool for both the seller and the buyer. It allows the seller to track sales, monitor inventory, and manage accounts receivable. For the buyer, it helps in keeping track of purchases, verifying the accuracy of the transaction, and managing accounts payable.

3. Payment Reminder: An invoice serves as a formal request for payment. It clearly states the amount owed by the buyer and the due date for payment. This helps to remind the buyer of their financial obligation and encourages timely payment.

4. Accounting and Taxation: Invoices are crucial for accounting and taxation purposes. They provide the necessary information for recording sales, calculating revenue, and determining tax liabilities.

5. Financial Planning: Invoices provide valuable financial information that helps the seller in forecasting cash flow, analyzing sales trends, and planning for future growth. It also helps the buyer in budgeting and managing expenses.

Conclusion
In conclusion, an invoice is a source document that is prepared by the seller of goods on credit. It serves as a legal document, helps in record-keeping, acts as a payment reminder, facilitates accounting and taxation, and aids in financial planning. Therefore, option 'A' - Invoice is the correct answer to the question.

Answer

I know A is a correct answer.

Answer

A)Invoice

Answer

D

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