Judy had a hair cut and paid $100 with a credit card. What type of sale is this?

Judy had a hair cut and paid $100 with a credit card. What type of sale is this?

• A. Cash sale
• B. Credit sale
• C. Barter sale
• D. Prepaid sale

Answer: (A)

Payment at the time of service using a card counts as a cash sale. The defining idea is when the payment is received. In a cash sale, the merchant is paid immediately, even if the payment method is a credit card, so there’s no extended credit to the customer. A credit sale would mean payment is promised for later, which isn’t the case here. It isn’t barter, since no item or service was exchanged for something other than money, and it isn’t prepaid because payment wasn’t made before the haircut was delivered. So this transaction is a cash sale.

Payment at the time of service using a card counts as a cash sale. The defining idea is when the payment is received. In a cash sale, the merchant is paid immediately, even if the payment method is a credit card, so there’s no extended credit to the customer. A credit sale would mean payment is promised for later, which isn’t the case here. It isn’t barter, since no item or service was exchanged for something other than money, and it isn’t prepaid because payment wasn’t made before the haircut was delivered. So this transaction is a cash sale.