Cash sales definition
/What are Cash Sales?
Cash sales are sales in which the payment obligation of the buyer is settled at once. Cash sales are considered to include bills, coins, checks , credit cards, and money orders as forms of payment.
The term can also refer to the sale of a security that requires immediate delivery.
Advantages of Cash Sales
A key advantage of a cash sale is that it eliminates the need for the seller to extend credit to a customer. Therefore, there is no risk of a bad debt . Without any bad debt expense, the seller can theoretically lower its prices and still generate a profit, which allows it to increase its market share by pricing lower than the competition.