Credit Terms Definition -What are Credit Terms?

Accounting Glossary 

Credit terms definition including break down of areas in the definition. Analyzing the definition of key term often provides more insight about concepts. Credit terms can be defined as: Description of the amounts and timing of payments that a buyer (debtor) agrees to make in the future. Credit term defines the terms of credit meaning that credit terms specify when payment is received for a sale made on account. Credit terms may be simple, just a due date, or credit terms can be more complex including things like discounts if paid within a lesser time frame then the standard credit terms. Credit terms can be writing if a format like 1/15, n/60, this credit term format meaning that there would be a 1% discount if paid within 15 days, normal terms 60 days. Credit terms can be very important to clarify payment expectations.