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Credit

Credit

1. An agreement between a buyer and a seller in which the buyer receives the good or service in advance and makes payment later, often over time and usually with interest. For example, a buyer may purchase a computer on credit for $600 and pay $100 per month over several months with interest. One of the most common ways of buying on credit is to use a credit card, but many companies have their own credit schemes. A steady flow of credit in an economy is considered important for financial health. See also: Accounts receivable, Accounts payable.

2. The amount in a bank account or some other account. For example, if one has $800 in his/her bank, he/she is said to have an $800 credit. Likewise, if he/she receives a check for another $200, he/she receives a further $200 credit.

credit

1. The ability to borrow or to purchase goods and services with payment delayed beyond delivery.
2. An accounting entry resulting in an increase in liabilities or owners' equity or in a decrease in assets. Compare debit.
3. The balance in an account.

Credit.

Credit generally refers to the ability of a person or organization to borrow money, as well as the arrangements that are made for repaying the loan and the terms of the repayment schedule.

If you are well qualified to obtain a loan, you are said to be credit-worthy.

Credit is also used to mean positive cash entries in an account. For example, your bank account may be credited with interest. In this sense, a credit is the opposite of a debit, which means money is taken from your account.

credit

  1. a financial facility which enables a person or business to borrow MONEY to purchase (i.e. take immediate possession of) products, raw materials and components, etc. and to pay for them over an extended time period. Credit facilities come in a variety of forms including BANK LOANS and OVERDRAFTS, INSTALMENT CREDIT, CREDIT CARDS and TRADE CREDIT. Interest charges on credit may be fixed or variable according to the type of facilities offered or, in some cases, loans may be interest-free as a means of stimulating business. See CREDIT CONTROL, MONETARY POLICY, EXPORTING, LETTER OF CREDIT, BILL OF EXCHANGE, CONSUMER CREDIT ACT 1974, INTEREST RATE.
  2. to acknowledge (in DOUBLE-ENTRY ACCOUNTS) the receipt of services rendered to a firm. This is done by making an accounting entry which records the value of goods or services received by the company in the company's account of the supplier of the goods or services. A credit entry in a company's double entry accounts represents either a decrease in the company's assets or an increase in its liabilities. See DEBIT.

credit

a financial facility that enables a person or business to borrow MONEY to purchase (i.e. take immediate possession of) products, raw materials and components, etc., and to pay for them over an extended time period. Credit facilities come in a variety of forms, including BANK LOANS and OVERDRAFTS, INSTALMENT CREDIT, CREDIT CARDS and TRADE CREDIT. Interest charges on credit may be fixed or variable according to the type of facilities offered or, in some cases, ‘interest-free’ as a means of stimulating business.

In many countries CREDIT CONTROLS are used as an instrument of MONETARY POLICY, with the authorities controlling both the availability and terms of credit transactions. See CONSUMER CREDIT ACT 1974, INTEREST RATE.

credit

(1) In finance,the availability of money.(2) In accounting, a liability or equity entered on the right side of the page in double-entry accounting. The concept is confusing to most consumers because an accounting “credit” does not mean more “stuff” such as property or money; it merely indicates the side of the page on which the entry is posted.The other entry is called a debit.

References in periodicals archive ?
Because estate and income taxes are different, neither country's tax code allows a credit for the taxes imposed at death by the other country.
Also, federal LBIC programs can provide wage credits per qualified employee ranging from $1,500 to $4,000 per year; state credits (available in California and 38 other states) range from $500 to $10,000 per qualified employee, per year.
TEI previously filed a brief amicus curiae in support of DaimlerChrysler's petition for writ of certiorari, urging the Court to review the decision finding Ohio's investment tax credit unconstitutional.
Some developers, depending upon their particular circumstances, may obtain little or no benefit from the tax credits generated from a rehabilitation project due to the effect of net operating losses, the Alternative Minimum Tax, or other sources of tax credits.
Further, while for some households the use of credit in making a purchase is simply a matter of convenience or a means of managing liquidity, for others borrowing may be a means of sustaining consumption through a period of household economic distress.
Each year for 10 years, individual investors receive tax credits that directly reduce the taxes they owe on their last $25,000 of income.
The different scoring models and regulations governing credit scores found in the Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act of 2003 (FACTA) are the motivation behind developing a special course of study aimed at credit and lending professionals.
At the start of 2006, Congress was poised to enact another one-year extension of the research credit (which otherwise expired on Dec.
In theory, any additional equity that can be generated from State Historic Rehabilitation Tax Credits should be encouraged and applauded.
Letters of credit represent a secure universal method of payment in international business transactions.
As detailed above, the EPA '05 has added several new tax credits for individuals.
This course takes you through the mechanics of the most basic form of credit derivative trade (the credit default swap) and builds on this to describe a number of other credit derivatives.