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  • Question
  • To buy goods on credit means to


  • Options
  • A. promise to pay for goods later.
  • B. pay only a discount price.
  • C. promise to pay only a sale price.
  • D. pay cash for goods.

  • Correct Answer
  • promise to pay for goods later. 

    Explanation

    If as a business, you buy goods or services on credit from a supplier (accounts payable) then the supplier will supply the goods and business will incur a liability to the supplier for that amount, but no cash will change hands at that stage.

    Some of those shop keepers allowed regular "trustworthy" customers to purchase items without having the full payment.

    Hence, Buying on credit means that no actual money has changed hands.

  • Tags: AIEEE, Bank Exams, CAT, Analyst, Bank Clerk, Bank PO

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    • Options
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