Most business transactions are carried out on a credit basis. As a manager, your decisions regarding accounts receivable must include whether to give credit, and, if so, you must determine eligibility, amounts, and terms. The type of credit terms extended to customers determines the length of time a


has to


for the purchase. This, in turn, affects sales volume. For example, a longer credit term will probably result in increased sales, while a shorter credit term will likely result in less sales.