PRC-3 · Chapter 4 · Question 55 of 65
A retail store receives weekly deliveries of clothing from a factory. The factory's contract allows the retail store to sell the clothes and pay the factory 45 days after delivery. What form of finance is the factory providing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Trade credit
Explanation
Trade credit is a common short-term financing arrangement where suppliers allow businesses delayed payment terms for goods already received.
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