Question

What is the difference between a cash transaction and a credit transaction?

Answer 1

Hey friend,

The answer to your question is following;

Cash Transaction: A cash transaction is the one in which the payment is carried out in terms of cash and is settled at the time in question.

Credit Transaction: A credit transaction refers to a situation in which the product is sold/purchased but the payment is pending for a later date in the future. This mostly happens in credit cards where the payment is temporarily made and is listed in your statements. This payment is to be re-paid later in time.

I hope the answer is helpful.

Thanks

Answer 2

A cash transaction is the one that is made by making full and final payment with cash.

On the other hand, a credit transaction is done on credit.

In a credit transaction, you can make your purchase and take your item home, but you have the option of paying for it later.

Since you are making payment later, you will need to pay some amount of interest as well on the value of the purchase.

Credit cards are the perfect example of this transaction type.