Glossary
Cash sale
A sale where the customer pays straight away.
What it means
A sale settled immediately in cash or by card or cheque, with no trade receivable arising.
Example
A shop selling goods for RM60 cash records the sale and the money received together.
Why it matters
Cash sales bring money in at once, so no receivable is created and there is nothing to collect later.
In practice
A cash sale is entered by debiting the cash or bank account and crediting the sales account at the moment of sale. No trade receivable is created. The revenue still goes into the income statement, and the money at once adds to current assets as cash or bank.
Suppose a shop sells goods for RM800 and the customer pays at once by cash or card. Cash rises by RM800 and sales rise by RM800 in one entry. A cash sale means immediate payment, whether by notes, card or transfer, not only coins and notes.
The contrast is a credit sale, where the customer takes the goods now and pays later. That creates a receivable and the chance of irrecoverable debts. A cash sale is settled instantly, so it never appears in the sales ledger and carries no risk of non-payment.
If you mix up cash and credit entries in the day books, one of our teachers can drill the difference with you using past-paper transactions. Book a trial class.
Related terms
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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