Question

What is credit extension? discuss the types of credit sales?

Answer 1

A loan or extension of credit that is larger than what the borrower can repay. Overextensions can require the borrower to consolidate his or her debts into a single loan. Consumers who must use more than a third of their net income to repay debt other than their mortgage are generally considered to be overextended.

Answer 2

Credit extension means the making of a loan or the issuing of the letter of a credit

Types of credit sales :-

♥ Cash Sales - It refers to sales in which customer is making payment at the time of purchase.

♥ Credit Sales - It refer to sales in which customer is making payment at a later date.

♥ Advance Payment Sales – Sales in which customer has to make payment before sales.

Hope it helps !!

Shreya ❤