Question

Define the term “purchase on credit”

Answer 1

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Credit purchase is happened when entity make the purchase on goods or services and then make the payments later.Yet, the transactions will affect at the time of pay payments. The account that affect the credit purchase at the time purchasing are account payable and the corresponding accounts like expenses and assets.

Answer 2

Credit Purchases in Accounting

When goods or services are bought by a business on account or on credit for reselling later, we can then say that Credit Purchases have taken place in accounting. As with purchases, credit purchases can be used to by goods and services however these are on credit or on the account.

Due to the credit purchase, an account receivable and an account payable are then created. The account payable is the current liability for the buyer, and they will pay the supplier at an agreed later date. The buyer should record it as a Credit Purchase.

EXAMPLES OF CREDIT PURCHASE IN A SENTENCE

That section provides a detailed analysis of the process that market participants must undertake to enter into a Credit purchase or sales contract with Microsoft.

Payable is a liability that requires the purchaser to make a future payment on credit purchase.

Hope it will helps you ☺️

# Miss Khan

Answer