what is credit ?5marks defination
Answers
Credit
• It is a system allowing customers to pay at a later date for goods or services
supplied.
• public recognition for praise .
Explanation:
Credit:-
is a broad term that has many different meanings in the financial world. It is generally defined as a contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date—generally with interest. Sometimes, it may even involve crediting a 401(k), for instance.
Credit also refers to the creditworthiness or credit history of an individual or company. It also refers to an accounting entry that either decreases assets or increases liabilities and equity on a company's balance sheet.
Understanding Credit
In the first and most common definition of the term, credit refers to an agreement to purchase a good or service with the express promise to pay for it later. This is known as buying on credit.The most common form of buying on credit is with credit cards. People tend to make purchases with credit cards because they may not have enough cash on hand to make the purchase. Accepting credit cards can help increase sales at retailers or between businesses.
The amount of money a consumer or business has available to borrow—or their creditworthiness—is also called credit. For example, someone may say, "He has great credit, so he's not worried about the bank rejecting his mortgage application."
In other cases, credit refers to a deduction in the amount one owes. For example, imagine someone owes his credit card company $1,000, but he returns a purchase worth $300 to the store. He receives a credit on his account and then owes only $700