Moreno Supply Company sells garden hoses to Midwest Lawn and Garden Center but does not require Midwest to pay for them right away. If this is a standard trade-credit agreement, Midwest will have to pay for the garden hoses in 30, 60, or 90 days .
In a standard trade-credit agreement between Moreno Supply Company and Midwest Lawn and Garden Center, the payment terms for the garden hoses are typically outlined in agreed-upon credit terms. Common credit terms involve a specific period known as the credit period or credit terms period.
This period represents the duration during which Midwest is expected to pay for the garden hoses. The length of the credit period can vary and is usually negotiated between the two parties.
It might be, for example, 30, 60, or 90 days. Midwest Lawn and Garden Center will be obligated to pay for the garden hoses within this stipulated credit period, allowing them a window of time to settle the payment without incurring penalties or interest charges.