Credit Policies

Can be instituted with suppliers and vendors to the company and with customers or buyers of the company's goods and/or services.  An accounts payable arises when goods or services are received from suppliers or vendors to the company, if all of some of the balance is owed from what they have supplied.  An accounts receivable arises to the company if a outstanding balance is owed from customer's or buyers for goods and/or services delivered.  In some cases, suppliers and vendors will arrange for various types of trade credit ranging from 10-60 days.  For customer's, installment accounts receivable can be adopted based on the credit worthiness of the customer.
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