Which statement best describes trade credit (accounts payable)?
A) It is extended by suppliers.
B) It is financed on trade debit account cards.
C) It has higher interest charges than credit cards.
D) It is a product on consignment that is paid for when used.

Question

Quizplus · Accepted Answer

Trade credit or accounts payable is credit that is extended by suppliers to their customers. It allows the customer to purchase goods or services on credit and pay for them at a later date. It is a common tool used by businesses to improve cash flow and manage their expenses.

Which Statement Best Describes Trade Credit (Accounts Payable)