What is a Cash Sale?
The term “cash sale” can be used in several different contexts. In just about every situation, a cash sale has to do with the purchase of goods or services, and involves the immediate possession of the new owner, without any amount of time between purchase and assuming full ownership. People engage in cash sales on a daily basis, both in the world of finance and in retail situations. One of the more common applications of the term has to do with investments. Within this context, a cash sale is a financial transaction that is completed on the actual trade date, rather than taking place after the usual three day period involved in most types of settlements. The cash sale allows the new owner to take immediate possession free and clear. This arrangement allows the investor to retain or sell the security immediately, without having to wait any amount of time. In the event that the sale takes place late in the business day, the transaction can still be considered a cash sale and treated as
Whenever a sale is made which calls for the delivery of the securities the same day, the transaction is said to be a cash sale. What is a Regular Sale? A regular sale, or the regular way, is the delivering of the securities by the seller upon the business day following the day upon which the contract of sale was made. What is an Asked Price? The asked price is the price which is asked by the seller of the security. Somewhere between the bid and asked price, an actual price is agreed upon. What is a Bid Price? A bid price is the price offered for a security by a prospective buyer. What is a Market Price? A market price is the actual price at which a security is selling in the open market. What is a Firm Price? A price which is quoted and held to for a definite period of time is called a firm price. What is a Nominal Price? When there are no actual transactions or trades the probable value of a security as a basis for trading is estimated, and is called a nominal price. What is a Put and
a sale on account? 3. A letter ordering goods should contain four elements. What are they? 4. Distinguish among a bill, an invoice, a statement. 5. State points of similarity and of difference between a bill for goods and a bill for services rendered. 6. Why is it best to get a receipt when paying a debt? 7. Which form of receipt is preferable: a re- ceipted bill, a receipt, or a canceled check indorsed by the merchant? Give reasons for your answer. 8. “Your canceled check is your receipt.” In what sense is this statement true? 9. Find, from the dictionary, the definition of invoice, receipt, catalogue, discount, rebate, artisan, itemized, canceled, statement, coupon, remitter, memoranda, credit, debit, schedule. 10. In each of the following transactions, tell exactly what kind of business paper you would write: (a) Henry Smith buys some office supplies and gives a check for the amount. (6) William James pays in cash all that he owes, (c) Harvey Miller buys mer- chandise and gives a ch
