Which open account term reflects common business practice?

The option indicating that goods are shipped with an invoice aligns with common business practice because it establishes a standard procedure in accounts receivable transactions. When a seller ships goods to a buyer and includes an invoice, it clearly communicates the amount owed for the transaction. This method allows buyers to receive the products they need and provides them with a formal record of their obligation to pay, creating a structured expectation around payment timelines.

Moreover, this practice supports the flow of business transactions by encouraging trust; buyers receive goods before making payment, which can foster ongoing relationships. Invoices serve as documentation for both parties, facilitating better tracking and reconciliation of accounts. This approach is particularly effective in industries with established buyer-seller relationships, where the risk of default may be lower.

In contrast, payment on delivery and full upfront payment can create barriers for customers who may not have the funds available at that moment, reducing the likelihood of sales. Payment through escrow services, while a secure method for certain transactions, is not a common practice for everyday open account terms because it adds layers of complexity and may not be necessary for regular business transactions.