What type of financial document provides details on merchandise sold and credit terms?

An invoice serves as a detailed financial document that outlines the merchandise sold and the terms of credit associated with that sale. It typically includes essential information such as the description of the goods or services provided, quantities, unit prices, total amounts due, and payment terms.

Invoices are crucial in business transactions because they formally request payment from the buyer. The credit terms specified in an invoice indicate the time frame within which the payment should be made and may also include details about any discounts offered for early payment or penalties for late payment. This structure is vital for maintaining clear financial records for both vendors and customers.

In contrast, other options like sales reports, purchase orders, and expense reports focus on different aspects of business operations. Sales reports summarize overall sales activity, purchase orders are requests to suppliers for goods, and expense reports summarize the costs incurred by employees or departments. Each of these documents serves unique purposes but does not provide the same detailed information regarding merchandise sold and credit terms as an invoice does.