Which term describes credit extended by providing services or goods with payment due later?

• A. Line of Credit
• B. Installment Purchase Contract
• C. Deferred Billing
• D. Service Credit

Answer: (D)

Credit extended by providing services or goods with payment due later is service credit. This means you receive the goods or services now and agree to pay after a set period, creating a credit arrangement at the point of sale. It’s a credit sale that many vendors offer for ongoing accounts or utilities. The other terms describe different financing setups: a line of credit is a pre-approved pool you can borrow from as needed; an installment purchase contract involves paying for a specific item in scheduled installments, typically with the item serving as security; deferred billing merely postpones sending the bill and doesn’t inherently define a credit agreement for the purchase.