Chapter 1 Flashcards
Is an arrangement to receive cash, goods, or services now and pay for them later.
Credit
Is defined as a transaction involving the transfer of goods, services, funds, property, or rights, thereby creating an obligation on the part of those who receive them, that must be complied with in the future
Credit
The parties are called
Creditor - debtor
Or
Lender - borrower
The relationship if the item is goods
Creditor - debtor
Services
Creditor - debtor
Funds
Lender - borrowee
Property
Bailor - bailee
The transaction in property are covered by
Commadatum contracts
Rights
Lessor - lessee
What article says that by the contract of sale one of the contracting parties obligates himself….
Article 1458 of the civil code
Whether on a credit arrangement or not, it is the intention of the parties taht both the ownership and possession of goods or services be transferred to the buyer, who must pay for them
Sale
Refers to transfer of possession
Delivery
Arising out of sale transactions and cash loans
Credit obligations
Is consummated by mutual consent and the non payment of rent on due date is certainly not intended by the lessor or owner of the rental property
Credit transaction
Time allowance to pay a rental beyond the due date
Grace period
If the property is lent out for free
Contract of rent or lease
Is always recommended, provided, of course, that it is feasible primarily in terms of the companys financial resources and the adaptibility and adjustability of its employees to the recommended approach
Systems approach
Should be capable of being handled with ease by the employees
Credit and collection system
Problems are looked at not on a single incident basis, but in relation to thw total system
System approach
Stricter credit criteria would always result in
Low sales
Loosening up of the credit criteria would almost always results in
Higher sales
Are true losses, loss of the finance charges and fully or partially, the cost of the merchandise
Uncollectible finance income
