Florida General Contractor Practice Exam

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What do cash sales typically include?

  1. Sales made on credit

  2. Immediate customer payments

  3. Delayed revenue recognition

  4. Invoices opened for future payments

The correct answer is: Immediate customer payments

Cash sales typically include immediate customer payments, which signifies that the transaction occurs at the moment of sale. In a cash sale, customers pay upfront using cash, credit cards, or other immediate payment methods, ensuring that the business receives funds instantly. This contrasts with other types of sales that involve credit, where the customer pays after a certain period, or where revenue is recognized over time due to payment agreements. Immediate payment is essential for cash flow management in a business, allowing for quick reinvestment and operational financing. By understanding that cash sales mandate prompt payment, one can appreciate how they contribute to a business's liquidity and financial health.

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