Which statement describes a cash sale?

Which statement describes a cash sale?

• A. A sale that is settled immediately by the customer.
• B. A sale where payment is made after a credit period.
• C. A sale that relies on a remittance advice.
• D. A sale involving only online transactions.

Answer: (A)

A cash sale is a sale where payment is received immediately at the point of sale. That means the seller gets cash or an instant bank transfer right away, so no accounts receivable or debtor is created. If payment is after a credit period, that describes a credit sale, not a cash sale. A remittance advice is just a document about payment and doesn’t define when payment occurs. Online transactions can be cash or credit; the defining feature of a cash sale is the immediate settlement, not the sales channel.

A cash sale is a sale where payment is received immediately at the point of sale. That means the seller gets cash or an instant bank transfer right away, so no accounts receivable or debtor is created.

If payment is after a credit period, that describes a credit sale, not a cash sale. A remittance advice is just a document about payment and doesn’t define when payment occurs. Online transactions can be cash or credit; the defining feature of a cash sale is the immediate settlement, not the sales channel.