Jennifer runs a ski store in Banff, Alberta. She buys all her skis for the season in the fall but doesn't receive any money until she sells the skis, which is usually a few months later. The suppliers of the skis will extend the time she needs to pay for the skis to 90 days. What is the term to describe what her suppliers are offering Jennifer?
A) extended credit
B) trade credit
C) supplier credit
D) line of credit

Question

Quizplus · Accepted Answer

The term to describe what Jennifer's suppliers are offering is trade credit. Trade credit is an agreement between businesses in which one party provides goods or services to another party with the understanding that payment will be made at a later date. This is a common practice in the retail industry, where businesses buy inventory from suppliers on credit and pay for it later when they sell the goods. The suppliers are giving Jennifer a 90-day trade credit, which means she can pay for the skis 90 days after receiving them.

Jennifer Runs a Ski Store in Banff, Alberta