Question

Credit purchase indicates the paying of money

• A. On delivery of goods
• B. At a later stage as specified
• C. Before receiving the goods
• D. At the time of placing order

Hint:

• Credit Purchase Goods/services are received now, payment is made later.
• Seller extends credit to the buyer.
• Payment terms specify when the payment is due (e.g., in 30, 60, 90 days).
• This contrasts with:
  • Cash on Delivery (COD): Payment on receipt.
  • Advance Payment: Payment before receipt.

Answer 1

The Correct Option is B

A credit purchase (or buying on credit) means that goods or services are received by the buyer, but the payment for these goods or services is deferred to a future date, according to terms agreed upon between the buyer and the seller. Let's analyze the options:

• (a) On delivery of goods (COD - Cash On Delivery): This means payment is made at the time the goods are received. This is not a credit purchase; it's an immediate payment upon receipt.
• (b) At a later stage as specified: This is the essence of a credit purchase. The buyer receives the goods/services now and agrees to pay for them at a specified future date or within a specified period (e.g., net 30 days, net 60 days).
• (c) Before receiving the goods (Advance payment / Prepayment): This means payment is made before the goods are delivered. This is the opposite of a credit purchase from the buyer's perspective (it's credit extended *by* the buyer *to* the seller).
• (d) At the time of placing order: This is also a form of advance payment or payment with order, not a credit purchase.

Therefore, a credit purchase indicates that money is paid at a later stage as specified by the credit terms. \[ \boxed{\text{At a later stage as specified}} \]