When sales are made without the accompaniment of a formal debt contract,the sales are said to be on:
A) conditional sale terms.
B) open account.
C) trade credit.
D) sight draft.

Question

Quizplus · Accepted Answer

Open account is the term used when sales are made without a formal debt contract. This is a common method of conducting business transactions where the seller extends credit to the buyer, and the buyer is expected to pay within a certain period of time. This arrangement is usually based on the trust and creditworthiness of the buyer, and no collateral or security is usually required. Conditional sale terms refer to a contract in which the ownership of the goods sold remains with the seller until the buyer fulfills certain conditions, such as paying the full price or meeting other contractual obligations. Trade credit refers to the credit extended by a supplier to a customer to purchase goods or services. A sight draft is a type of draft that must be paid upon presentation.

When Sales Are Made Without the Accompaniment of a Formal