Receipt definition
/What is a Receipt?
A receipt is a written document triggered by the receipt of something of value from a third party. This document acknowledges that the item has been received. A receipt may contain the date of the transfer, a description of the item received, the amount paid for the item, any sales tax charged as part of the transfer, and the form of payment (such as with cash or a credit card).
Characteristics of a Receipt
The main characteristics of a receipt include the following:
Identifies the seller and buyer
Serves as a source document for the associated transaction
Uniquely identifies the associated transaction
Itemizes the individual components of the amount paid to the seller
Describes the payment method used
Reasons for Issuing a Receipt
Receipts are usually associated with the delivery of goods or services from a supplier. They can be used for several reasons, including the following:
Ownership transfer. The receipt documents the transfer of ownership to the buyer; this is most likely to be the case for a high-value item.
Control point. The receipt acts as a control, so that the buyer has proof of the amount paid, and the seller has proof that the item was sold to the buyer.
Accounting. To form the basis for an accounting entry to record the underlying transaction; this is most commonly the case when the underlying accounting system is a manual one.
Ownership documentation. To document ownership for insurance purposes; this is a good way to establish the insurable value of the asset.
Proof of delivery. As proof of delivery from the supplier, in case goods are returned under warranty.
Proof of sales tax paid. The receipt provides evidence that a sales tax was paid as part of the transaction, so that the buyer is not liable to pay a use tax.
Who Creates a Receipt?
A receipt may be automatically generated by the seller (such as by a cash register). Or, under more informal or low-volume circumstances, a receipt may be produced manually by the seller.