Question

What are the differen between cash settlement and credit settlement?

Answer 1

HERE IS YOUR ANSWER,

The only difference between cash and credit transactions is the timing of the payment. A cash transaction is a transaction where payment is settled immediately. On the other hand, payment for a credit transaction is settled at a later date.

Answer 2

Answer:

The only difference between cash and credit transactions is the timing of the payment. A cash transaction is a transaction where payment is settled immediately and that transaction is recorded in your nominal ledger. The payment for a credit transaction is settled at a later date.

Explanation:

cash transaction:

A cash transaction is a business transaction that involves exchange of cash at the time of occurrence of the transaction itself. Cash in this case implies settlement – the settlement may be in actual cash, by credit or debit cards, check payment or bank transfer but would still qualify as a cash transaction if they are settled at the time of occurrence of the transaction itself.

credit transaction:

A credit transaction is a business transaction which although has monetary impact does not involve exchange of cash at the time of occurrence of the transaction, but is settled in cash at a subsequent date.

Credit transactions result in creation of asset (receivable) or liability (payable) in the books of accounts. This asset or liability is extinguished from the books at the time of settlement.