In which type of sales arrangement does a seller allow a buyer 30 to 60 days to pay for a purchase?
A) a bank loan
B) trade credit
C) a promissory note
D) factoring

Question

Quizplus · Accepted Answer

The sales arrangement described in the question is trade credit, where the seller allows the buyer a certain amount of time to pay for their purchase. Choice A, a bank loan, is not a sales arrangement but a form of financing. Choice C, a promissory note, is a legal document in which the borrower promises to pay back a loan according to specified terms. Choice D, factoring, is a process where a company sells its accounts receivable to a third-party factoring company to receive immediate payment, rather than waiting for their customers to pay their invoices.

In Which Type of Sales Arrangement Does a Seller Allow