RECEIPT —MEANING, FEATURES, IMPORTANCE AND REASONS FOR ISSUANCE

Post a Comment

A receipt is a business document that serves as evidence that payments have been paid for products or services.

Receipts are typically issued to acknowledge that cash or cheque has been received from a customer for goods sold or service rendered to him.

A receipt confirms that the seller truly received money from the buyer.

It normally contains all the relevant information about a specific payment that a business has received or the customer has paid.

A receipt is also used to verify the amount of payment made by the purchaser.

It is used to determine whether or not the amount of payment made by the consumer and the amount of payment received by the business correspond.

A receipt is usually pre-numbered and is two-fold: The seller sends a copy of the receipt to the buyer but keeps a copy for their records so they can enter it in the cash book.

Why is a receipt issued?

A receipt is issued for the following reasons:

1. To serve as proof of partial or full payment.

2. To provide proof of the buyer's ownership transfer of the goods

3. To serve as the basis for entering cash and cheque transactions into the cash book.

4. Buyers may use supplier receipts as proof of delivery if the products are returned under warranty.

Features of receipt

Receipt generally contains the following information:

1. The name of the paying customer

2. Date the company received payment made by the customer, be it cash or cheque

3. Amount in words and figures of cash or a cheque payment that was received by the business

4. Signature of the receiving company or entity.

5. A description of the item sold to the consumer.

6. The payment method used by the customer.

Importance of receipt

1. Serves as proof of payment and receipt: To the buyer, a receipt serves as proof that payment for purchased goods or services had been made by him.

To the seller, a receipt is an evidence that he has received monetary payment for the goods and services he has sold.

2. Used for recording in the cash book: Cash book records cash and cheque payments  and receipts. 

To the buyer, receipt is used for recording transactions on the credit side of the cash book which are mainly cash and cheque payment for goods and services

To the seller, receipt is used for recording transactions on the debit side of the cash book which are mainly cash and cheque receipt for goods and servers

As a result, the receipt serves as the source document and is the major business document used in recording an entry in the cash book.



Help us grow our readership by sharing this post

Related Posts

Post a Comment

Subscribe Our Newsletter