Terms of payment, Managerial Accounting

Assignment Help:

Terms of payment vary broadly in practice. At one conclusion, if the seller has financial resources, she or he may extend liberal credit to the buyers, conversely the buyer pays in advance and finances the whole trade cycle. The terms of credit differ for various industries and are dictated through prevailing trade practices. Generally, businesses operating in monopoly environment will require advance or cash payment while business operating in a competitive environment will expand credit to the buyers. The main terms of payment are as listed as given below:

Cash Terms

While goods are sold on cash terms, the sales consideration or say payment is received either before goods are sold as advance payment or while the goods are delivered as cash on delivery Cash term usually exist under the subsequent conditions:

(a) While goods are made to order

(b) While the buyer is perceived to be less credit worthy

(c) The seller is in strong bargaining position.


Related Discussions:- Terms of payment

Strategy, Strategy A business characteristically invests considerable t...

Strategy A business characteristically invests considerable time and money in developing or creating its strategy. Employees, harried with day-to-day tasks, sometimes fail to s

Describe the limitations of management accounting, Describe the Limitations...

Describe the Limitations of management accounting: 1. Based on accounting information: the correctness and effectiveness of managerial decisions will depend upon the quality

Nominal Payback Periods, What would be the Nominal Payback Period for an ac...

What would be the Nominal Payback Period for an account with 4% compounded annually for 5 years.

Testing the slope, Testing the Slope The strong point of the relationsh...

Testing the Slope The strong point of the relationship among the dependent variable and each of the independent variables can be determined using 3 methods: 1) Correlation

Labor standard, Describe the impact of different types of standards on moti...

Describe the impact of different types of standards on motivations and specifically,the likely effect on motivation of adopting the labor standard recommended?

Assignment, Application of Information technology in respect of management ...

Application of Information technology in respect of management information system

Accounting for business decision, Predisco ( like myob) online project, ple...

Predisco ( like myob) online project, please let me know if u can do it.

Input-exogenous variables, Input or exogenous variables These are varia...

Input or exogenous variables These are variables of two types: 1) Controlled variables: These are variables that can be controlled by management. By changing the input

Cash planning, Firms need cash to invest in inventory, receivables and fixe...

Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd