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15 Cards in this Set
- Front
- Back
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Terms of sale
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The conditions under which a firm sells its goods and services for cash or credit.
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Credit analysis
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The process of determining the probability that customers will not pay.
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Collection policy
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The procedures followed by a firm in collecting accounts receivable.
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Credit period
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The length of time for which credit is granted.
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Invoice
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A bill for goods or services provided by the seller to the purchaser.
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Cash discount
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A discount given to induce prompt payment. Also, sales discount.
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Credit instrument
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The evidence of indebtness.
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Credit cost curve
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A graphical representation of the sum of the carrying costs and the opportunity costs of a credit policy.
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Captive finance company
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A wholly owned subsidiary that handles the credit function for the parent company.
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Five C's of Credit
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The five basic credit factors to be evaluated: character, capacity, capital, collateral, and conditions.
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Credit scoring
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The process of quantifying the probability of default when granting consumer credit.
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Again schedule
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A compilation of accounts receivable by the age of each account.
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Economic order quantity (EOQ)
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The restocking quantity that minimizes the total inventory costs.
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Materials requirements planning (MRP)
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A set of procedures used to determine inventory levels for demand-dependent inventory types such as work-in-progress and raw materials.
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Just-in-time (JIT) inventory
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A system for managing demand-dependent inventories that minimizes inventory holdings.
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