When the goods are purchased or sold in cash, in that case the cash memo is prepared by the seller of goods. The contents of cash memo are same as of Invoice. Only difference is that the Invoice is prepared for credit sale and Cash Memo is prepared for cash sales.
For example, a business firm purchased some goods on 11.08.15 and the payment was supposed to make on 21.08.15. In this case, Invoice will be prepared. But if the goods is purchased against 100% cash payment then the Cash Memo shall be prepared.
The Contents of Cash Memo
Like invoice, the cash memo also contains the following particulars:-
- Name and address of the supplier.
- Name and address of the purchaser.
- Serial Number of cash memo.
- Date of cash memo.
- Customer or Purchaser’s Order number.
- Description of goods.
- Quantity of goods.
- Rates of Goods.
- Discount (Trade discount or cash discount, to be shown separately).
- Sales Tax number of purchaser and supplier in case of sale of goods.
- Service tax number of the supplier in case of sale of services.
- Total amount of cash memo must be written in words and figures.
- The cash memo must be signed by the duly authorized person.
- The area of Jurisdiction must be defined in cash memo.
- Normally, E. & O. E. also printed on all cash memos. It means if there is any mistake in cash memo that is subject to correction.
The cash memo is made in duplicate but according to the requirement of business firm, more than two copies also can be prepared.
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