Question

Cash memo is used for credit purchase/sale.

• A. True
• B. False

Answer 1

The correct option is B False

Whenever goods are sold in cash, a seller prepares a cash memo and records therein details of goods sold. This memo includes quantity, rate and total amount of goods sold, along with the date of transaction.

All cash transactions are recorded in the books of accounts on the basis of the cash memos.

A cash memo is prepared when goods are sold for cash.

Thus, a cash memo is given by a trader in the case of sale and it is received in the case of purchases.

Cash memos are used for cash purchases/sales in order to record the credit purchases/sales, an invoice or bills are prepared by the seller.