When credit is offered with only the invoice as a formal instrument of credit,the credit procedure is called:
A) invoice account.
B) open account.
C) unsecured account.
D) unsecured note.
E) None of these.

Question

Quizplus · Accepted Answer

When credit is offered with only the invoice as a formal instrument of credit, the credit procedure is called an open account. An open account is a form of trade credit where the buyer can purchase goods or services from the seller and pay the amount due at a later date, usually within 30, 60 or 90 days, without any security except for the creditworthiness of the buyer. There is no written agreement, promissory note, or collateral involved in an open account credit transaction.

When Credit Is Offered with Only the Invoice as a Formal