The area in accounts receivable management the credit terms. After the credit standards have been established and the creditworthiness of the customers has been management of a fine must determine the terms and conditions OR which trade credit will made available. ‘The stipulations under which goods are sold on credit are referred to as terms. These relate to the repayment of the amount under the credit sale. Thus, ‘credit te specify the repayment terms of receivables. Credit terms have three components: (I) credit period, in terms of the duration of time for whi trade credit is extended-during this period the overdue amount must be paid by the customer (b) cash discount, if any, which the customer can take advantage of, that is, the overdue amount will be reduced by this amount; and (c) cash discount period, which refers to the duration during which the discount can be availed of. These terms are usually written in abbreviation for instance.

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