King Construction Company receives weekly shipments of lumber, vinyl siding, and stone slabs from one of its materials suppliers. Since King Construction Company is a regular customer, the supplier has made an agreement to give the company discounts if it pays its bill early. This is an example of

Question

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This scenario describes trade credit, which is credit extended by suppliers for the purchase of their goods and services. Most trade credit agreements offer discounts to organizations that pay their bills early. For example, a supplier may offer terms of "1/10 net 30,"
meaning that the purchasing organization may take a 1 percent discount from the invoice amount if it makes payment by the 10th day after receiving the bill. Otherwise, the entire amount is due within 30 days.

King Construction Company Receives Weekly Shipments of Lumber, Vinyl Siding