Question

Importance of CASH MEMO?in detail

Answer 1

Cash Memo

In accounting, all transactions are properly documented as evidence of the financial trail. Cash Memo is a source document used in case of a cash transaction between the seller and a buyer.

In case of a cash sale, the seller prepares the cash memo and hands it over to the purchaser. It acts as a proof for all cash sales made by a business. On the other hand, it acts as a proof for cash purchase made by a person or business.

It can be seen as an equivalent to invoice but for cash sales. Most often a cash memo is prepared in a pair so that a duplicate copy is present with the seller as well. This helps the seller to compile all its cash sales along with reconciliation, tax payments, analysis, inventory planning, cash management, etc.


It contains the following details;

Date of transaction
Details of goods
Quantity
Rate per item
Gross total
Taxes
Net total
Terms & conditions

Answer 2

Answer:

The importance of cash memo is used to  prepare and track order.

Explanation:

• The document which is issued by a trader for the purchase of the cash is called cash memo.
• It is referred as a bill that is paid for the cash sales. It is a document which contains the cash that can be received for the sold of goods.

• The contents of cash memo are:

1) Name

2) Address

3) Details of the purchaser

4) Details of purchased orders

5) Goods details that are nature, quantity and description.

• Advantages of cash memo:

1) it is simple and easy to prepare and track the order.

2) it is used specifically by small business dealing with transaction of cash.

3) It is called as a legal document which resembles an invoice.

4) It has a signature of the particular person which becomes authenticated.

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