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

Explain indirect expanses, Explain Indirect expanses: These are expanse...

Explain Indirect expanses: These are expanses which can't be directly conveniently and wholly allocated to a specific cost centres or cost units examples of such expanses are h

Transfer pricing methods, Transfer Pricing Methods Transfer pricing met...

Transfer Pricing Methods Transfer pricing methods are concerned with the alternative means by which a transfer price can be set and its impact on organizations gauged. Emmanuel

Marginal costing technique, how company apply marginal costing techniques s...

how company apply marginal costing techniques show with an example

Budget, advantage and disadvantage of incremental budget

advantage and disadvantage of incremental budget

Adjusting entries, what do you debit and what do you credit in adjusting en...

what do you debit and what do you credit in adjusting entry for prepaid rent?

Trade credit, It is a spontaneous source of finance that is commonly extend...

It is a spontaneous source of finance that is commonly extended to business organization depending on the custom of the competition and trade prevailing within the organization and

International transfer pricing-compliance and documentation, International ...

International transfer pricing Transfer pricing is a perennial issue, within the international tax community (Richard Casna, Accounting and Business, in the year February 1988)

Computation of working capital required, Computation of Working Capital Req...

Computation of Working Capital Required 1. Operating Cycle Period = M+W+F+D-C     = 101.38 +2

Investments carried as trading securities, a)    Does Ford report any inves...

a)    Does Ford report any investments carried as trading securities, available-for-sale securities, or held-to-maturity securities? If so, go over their significance to both the b

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