What is the difference between open-end credit, and closed-end credit, and what are the costs associated with each?

Closed-end credit is a form of credit that must be paid off by a specific date. Open-end credit is an amount of credit that can be borrowed repeatedly as long as consistent payments are made according to the bank’s terms. The cost of these types of credit are fees and interest rates charged by the lender.

Depending on the need an individual or business may take out a form of credit that is either open or closed ended. close-end credit includes mortgages and auto loans, a line of credit is a type of open end credit

Increase

The accounts receivable asset shows how much money customers who bought products on credit still owe the business; this asset is a promise of cash that the business will receive. Cash doesn’t increase until the business collects money from its customers.