What document does a seller prepare to describe the goods sold and the terms for payment?

The document that a seller prepares to describe the goods sold and the terms for payment is called an invoice. An invoice serves as a detailed record of a transaction, outlining the specific items purchased, their quantities, prices, and the total amount due. Additionally, it typically includes payment terms, such as payment methods and due dates, which are crucial for both the seller and buyer in facilitating a smooth transaction.

This document not only helps the seller keep track of what is sold and to whom but also provides the buyer with essential information regarding what they are being charged for and when payment is expected. It acts as a formal request for payment and is a fundamental component of business transactions, ensuring clarity and accountability on both sides.

In contrast, a bill of sale is primarily a legal document that transfers ownership from seller to buyer, while a receipt acknowledges payment that has already been made. A purchase order is initiated by the buyer to request goods or services but does not serve the same purpose as an invoice in terms of detailing payment requirements or confirming the sale.