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Post date: Nov 12, 2012 1:54:32 PM
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Trade Credit
This is credit offered to you by suppliers.
The supplier’s payment terms allow you to
pay for the goods after you receive them
(e.g., 30 days later).
Payment Terms
A supplier’s requirement on when to be paid.
These are typically expressed in an abbreviated
fashion. For example, 2/10/N/30 means you
will get a 2% discount if you pay in 10 days or
you can pay the Net (N) amount in 30 days.
Interest Rate
The percentage of the loan amount that
you must pay in interest each year (e.g.
9% per year).
Liability
The general term for any amount owed to
someone else.
Accounts Payable
The amount a business owes to its suppliers
at any point in time. This is shown as a
liability on the company’s balance sheet.
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