Sandra has a dog boarding and grooming business. She purchases grooming supplies and dog food from a supplier and takes delivery; however, she has 30 days within which to pay the supplier's invoice. This is an example of which of the following?
A) line of credit
B) negative cash flow
C) a promissory note
D) trade credit

Question

Quizplus · Accepted Answer

This is an example of trade credit, which is when a supplier allows a business to purchase goods or services and pay for them at a later date, typically within 30 to 90 days. This can help a business manage cash flow by allowing them to receive and use the goods or services before having to pay for them.

Sandra Has a Dog Boarding and Grooming Business