what is terms of credit ??
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Answers
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Explanation:
Definition: Credit terms or terms of credit is the agreement between a seller and buyer that lists the timing and amount of payments the buyer will make in the future. In other words, this is the contract that describes the specific details of the seller’s payment requirements that the buyer must meet into order to purchase goods on account.
What Does Credit Terms Mean?
Most companies have credit policies set up with vendors or customers, so purchases can be made on account. These credit purchases help speed up commerce and increase sales because it allows customers to purchase items before they actually have the funds to buy them.
Example
Before a credit sale can be made, credit terms must be established. Most terms are dictated by industry practices and the specific goods sold in those industries. A standard term rate that applies across most industries is 2/10 N/30—often called 2/10 net/30.
This is the standard way to write out and abbreviate term details. Here is a cypher to understand the code:
Answer:
The term credit may be defined broadly or narrowly. Speaking broadly, credit is finance made available by one party (lender, seller, or shareholder/owner) to another (borrower, buyer, corporate or non-corporate firm). The former may be a pure lender (a financial institution or a private money-lender), a seller supplying goods against the buyer’s promise of future payment or a shareholder/owner of a corporate/non-corporate firm making funds available to the firm viewed as a separate entity.