When a firm receives goods or services and agrees to pay for them at a later date, their supplier is extending to them which of the following?

Question

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The supplier is extending trade credit to the firm, which allows them to receive goods or services and pay for them at a later date. Option A, payment extension, is not a commonly used term in finance. Option B, revolving credit, is a type of credit that allows a borrower to draw and repay funds as needed. Option D, commercial loan, is a type of loan that is issued by a bank or financial institution to a business for specific purposes.

When a Firm Receives Goods or Services and Agrees to Pay