Which of the following is true of trade credit?

Question

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Trade credit refers to the credit provided to a company by its suppliers when purchasing goods or services on credit. If suppliers do not offer a cash discount, the use of trade credit is usually free of cost, which is an advantage for companies. Options A and B are incorrect statements because trade credit is not unrestricted and is available to companies of all sizes. Option C is also incorrect because the rate of interest for trade credit is generally lower than that of other sources of short-term financing.

Which of the Following Is True of Trade Credit