What are Credit and Cash Purchase

Transcript

What are Cash and Credit Purchase Cash Purchase Example 1 Suppose B purchase goods for Rs 100000 from A on 10 Jan B make Payment to him on 10 Jan by cash Is it Cash Purchase or Credit Purchase A It is cash Purchase as Payment made to supplier immediately Example 2 Suppose B purchase goods for Rs 100000 from A on 10 Jan B make Payment to him on 10 Jan by cheque Is it Cash Purchase or Credit Purchase A It is cash Purchase as Payment made to supplier immediately (It is not necessary that payment should be made in cash) Cash Purchase If Payment for purchase transaction is settled immediately at the time of Purchase it is called Cash purchase Credit Purchase Example 3 Suppose B purchase goods for Rs 100000 from A on 10 Jan B make Payment to him after 5 days on 15 Jan Is it Cash Purchase or Credit Purchase A It is Credit Purchase Credit Purchase If Payment for purchase transaction is settled at a later date it is called Credit purchase Difference in Cash & Credit Purchase Cash Purchase Payment settled Immediately What are Cash and Credit Sale Cash Sales Suppose A sold goods for Rs 100000 to B on 10 Jan B make Payment to him on 10 Jan by cash Is it Cash Sale or Credit Sale A Since Receipt Settled Immediately on 10 Jan it is Cash Sales If Receipt for Sales transaction is settled immediately at the time of Sales it is called Cash Sales Credit Sales Suppose A sold goods for Rs 100000 to B on 10 Jan B make Payment to him on 15 Jan by cheque Is it Cash Sale or Credit Sale A Since Receipt Settled at a Later Date it is Credit Sales If Receipt for Sales transaction is settled at a later date it is called Credit Sales Difference in Cash & Credit Sale Cash Sale Receipt settled Immediately after sale Questions Mr. Ravi purchased goods from Mehta & sons and sold for Rs. 1,50,000, some for cash Rs. 30000 and some other to Preeti for 85,000. What is the value of credit sales? (a) Rs. 1,50,000 (b) Rs. 30,000 (c) Rs. 85,000 (d) Rs. 1,15,000 Answer (c) Rs. 85,000 Explanation Value of goods sold to Preeti are credit sales. as she has not yet made the payment