What term describes the practice of selling goods or services on credit?

The term that describes the practice of selling goods or services on credit is a credit sale. This practice allows customers to receive products or services immediately while deferring payment to a later date. It is a common arrangement in various businesses, including quick-serve restaurants, where customers may order and consume food now but pay after a predetermined period or upon receiving a bill.

In a credit sale, the seller extends credit to the buyer, meaning the buyer does not pay upfront but instead agrees to pay the seller later. This can foster customer loyalty, as it provides flexibility and convenience for purchasing. Additionally, businesses often monitor the creditworthiness of customers to minimize the risk of non-payment.

Other terms such as open account, deferred payment, or installment sale refer to slightly different mechanisms of credit transactions. For instance, an open account generally implies a running credit balance that allows the customer to make multiple purchases and payments over time. Deferred payment often indicates a specific period prior to when payment is made, but it may not encompass the entirety of the credit sale concept. Installment sale is characterized by a scenario where the total sale amount is split into fixed payments over a specific period, often associated with larger purchases rather than everyday transactions. In contrast, a credit sale is more straightforward