Thom has a culinary supply business. He orders pots and pans from a manufacturer and takes delivery. However, he has up to 10 days to pay the invoice without interest or penalty. This is an example of which of the following?
A) commercial paper
B) trade credit
C) equity financing
D) line of credit

Question

Quizplus · Accepted Answer

The fact that Thom has up to 10 days to pay for the pots and pans he orders from the manufacturer without incurring interest or penalty is an example of trade credit, which is essentially a form of credit extended to businesses by their suppliers to enable them to buy now and pay later.

Thom Has a Culinary Supply Business