What is the difference between cash and credit purchases?

In: Business and Finance, Small Business and Entrepreneurship

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Cash is offered by the buyer, to the seller. Cash is currency, as in dollars.

Credit is where the buyer offers a credit card, which is a promise to pay, by the credit card company, who then bills the card holder for the purchase price plus a interest rate, for the service of not having to pay at the time that the items are bought.

In an accounting point of view, cash purchases appear in the cash book. A credit purchase records a transaction in a party's name showing that we owe some money to that party to be paid later.

First answer by Buntingj. Last edit by Georgegijo. Contributor trust: 4 [recommend contributor]. Question popularity: 80 [recommend question]

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