Buying and selling on credit
On credit means the goods change hands now and the money follows later. Until it is paid, someone is owed.
In this room: 2 tasks, 8 questions
- Selling on credit4 questions
- Buying on credit4 questions
Money that customers owe the business is called trade receivables. It is an asset.
The sale is recorded when it is made, not when the money arrives.
When the customer pays, the money moves from Trade receivables to Bank.
Answer the questions below
3 more questions follow in this task.
Money the business owes its suppliers is called trade payables. It is a liability.
Goods bought to sell are an expense called purchases.
Nothing touches Bank until the supplier is paid.
Answer the questions below
3 more questions follow in this task.