When a seller allows a buyer thirty to sixty days to pay for a purchase, the sales arrangement is called
A) a bank loan.
B) trade credit.
C) a promissory note.
D) equity financing.
E) None of these answers is correct.

Question

Quizplus · Accepted Answer

Trade credit refers to the practice of allowing customers to purchase goods or services on credit and pay for them later within a set timeframe, which in this case is thirty to sixty days. This type of sales arrangement is commonly used in business-to-business transactions to facilitate trade between companies. A bank loan, promissory note, and equity financing are not accurately described by the scenario given.

When a Seller Allows a Buyer Thirty to Sixty Days