refers to an example of goods or services in return for a promise to pay its equivalent in terms of money in the future.

the ability of an individual to obtain money, goods or services to satisfy his personal needs in exchange for his promise to pay it in the future. This is sometimes called consumption credit for this is intended for personal consumption

a common way by which individual obtains consumers goods on credit.

buying with down payment and the balance to be paid on equal amortization basis.

a law which provides that any creditor shall furnish to each and every debtor before the transaction, a written, clear statement setting the following information: • cash price of the property; • amount of down payment; • itemized charges to be paid by the buyer; and • the total amount to be financed.

a contract between the buyer and seller whereby the former may take possession of the property and use the same, however, title to the property remains with the latter. The title will only be transferred to the buyer upon full settlement of his account. Default on the part of the buyer will lead to repossession of the property purchased.

It is executed by conveying to the creditor the title to the property. If the debtor default payment, the mortgage is foreclosed and disposed of according to legal proceedings. And the amount realized from the sale will be used to satisfy the debt. If the amount is greater than the obligation, the buyer will receive the excess.

a provision that accelerates the due date of the loan or credit in case of non-payment of some periodic payments. Hence, failure to pay for two (2) consecutive months shall make the balance due and demandable.

this contract leaves open the borrower to purchase a number of articles, however, he can only have title to al his purchases upon full payment of the last item purchased. Even if the first purchase has been fully paid for, the buyer cannot obtain full title to any of the things purchased unless he pays the last item fully. Failure to pay on time on any one item will lead to repossession of all the merchandise bought on credit.

the buyer may be scheduled to pay equal installments for a certain period, then at the end of such period, a big amount will be paid.

the contract is accompanied by a provision that the cashier of the firm where the buyer is working is authorized to collect from the buyer's salary/wages for the scheduled installment.

means that the buyer is getting himself something which he does not actually need, just only to get the item he wishes to purchase.

in the form of cash or money loans which are either secured or unsecured.

dating in the terms of sale have the effect of extending the net terms of credit. The extension is equal to the number of days between the time of shipment and the dating. It refers to adjusting time of payment to marketing perlod.

to assist the retailer in financing the goods purchased from the manufacturer O the manufacturer considers the importance of the relationship between the credit period and the buyer's selling season. This applies to merchandise purchased for a subsequent season e.g. umbrella. Here, the buyer gets the advantages of having the stock on hand at the start of the season, the possibility of getting a lower price than that quoted just before the selling season and being usually protected by the manufacturer from a price decline.

the buyer is relieved of the disadvantage of storage and insurance for ordering preseason. This type is accomplished by putting the order ahead of the season but postponing the shipment to a certain date, which in effect will also defer the payment.

this serves to put a distant seller on a competitive level with the nearby seller. The result of such dating will be to extend the credit period by applying the date of arrival rather than the date of shipment of the order.

such dating may be resorted to because of keen competitlon or to adjust to the buyer's marketing period.

It is given to buyers regardless of the promptness of payment. It lowers the list price of the merchandise. This kind of discount tends to induce quantity purchase and is also meant to attract the business of a favored class of customers

this is to stimulate prompt payment on receivables.

this is represented by the bank's power to attract deposits and its ability to give out loans. In accepting deposits, a bank becomes a detbtor to the depositor while the depositor becomes the bank's creditor.

represent money borrowed by the bank from the general public. When a bank extends loans, the borrower becomes the debtor while the bank becomes the creditor.

refers to the unconditional promise of a bank to pay the bearer on demand a certain sum of money.

highly perishable, low priced and easily consumed items call for shorter credit period. Seasonal goods, newly introduced with relative wide profits require longer credit period.

goods which has faster turnover calls for shorter credit period while those with longer/slower rate of turnover calls for longer credit period.

further location calls for longer credit period while customers with nearer location calls for shorter credit period.

wholesalers of products having established and accepted market requires for more conservative terms (shorter credit period) while new products calls for longer credit period.

seller with a weak capital are availed of a shorter credit period while seller with a strong capital are availed of a longer credit period

inferior credit risk are extended with a shorter credit period while satisfactory credit risk are extended with a longer credit period.

depression period requires longer credit period while prosperity period requires shorter credit period.

wholesalers are availed of a shorter credit period while retailers are availed of a longer credit period.

refers to the length of time within which the credit is extended.

refer to anything of value that is entrusted to the bank for safekeeping. These represent liabilities of the bank and these are in the form of cash or near money.

It is one that originates from over-the-counter in the form of cash and near money. It changes the form of money supply from currency to deposit money.

arises out from the proceeds of loans such as when one borrows from a bank and may open a current account in his name: dr. = loans & discounts; Cr. = demand deposits

are withdrawable on demand upon the presentation of checks.

are those which could be withdrawn after a specified period of time.

are covered by passbooks issued to the depositor upon opening an account. Withdrawals are made by the use of withdrawal slips.

these are withdrawable through the operation of an ATM (Automated Teller Machine) and are evidenced by an ATM Card issued to the depositor.

funds entrusted to the bank for safekeeping by private individuals.

those coming from the business sector.

represents those owned by the government or its political subdivisions or instrumentalities.

refer to the major part of bank credit whereby a bank earns the greatest portion of its income.

a consolidation of the credit needs of a certain borrower based on experience and the bank extends it to facilitate the borrower in his credit needs.

a special arrangement between the bank and the customer whereby the latter is allowed to draw checks in amounts beyond his balance up to a previously agreed amount

this is similar to regular line of credit except that after the amount is drawn upon, the used portion cannot be availed of again. The amount available decreases as the line is availed of by promissory notes until the amount is exhausted.

this usually comprises of an amount granted which is ascertained from the businessman's regular needs and regularity of payments. It is availed of by promissory notes. It can be utilized over and over again provided the amount granted is not exceeded and that the specified period has not expired.