identification

Amounts of money owed to a firm by customers who have bought goods or services on credit.

The minimum quality of creditworthiness of a credit applicant that is acceptable to the firm.

The total length of time over which credit is extended to a customer to pay a bill.

The period of time during which a cash discount can be taken for early payment.

A percent (%) reduction in sales or purchase price allowed for early payment of invoices. It is an incentive for credit customers to pay invoices in a timely fashion.

Credit terms that encourage the buyer of seasonal products to take delivery before the peak sales period and to defer payment until after the peak sales period

A system used to decide whether to grant credit by assigning numerical scores to various characteristics related to creditworthiness.

A limit to the amount of credit extended to an account. Purchaser can buy on credit up to that limit.

Method that controls expensive inventory items more closely than less expensive items.

The quantity of an inventory item to order so that total inventory costs are minimized over the firm’s planning period.