Which of the Following Statements Is True of Trade Credit

question 83

Multiple Choice

Which of the following statements is true of trade credit?

• A) It is also called a revolving credit agreement.
• B) It is a requirement lenders impose on borrowers as a condition of loans.
• C) It is granted by suppliers after evaluating the creditworthiness of a firm.
• D) It is the part of a firm's net income that the firm reinvests.

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Definitions:

Limited Liability

A legal structure where a company's owners are protected from personal liability for the company's debts or liabilities.

Limited Liability

Refers to a legal structure where a company's owners are not personally liable for the company's debts or liabilities.

Sole Proprietorship

A business owned and operated by a single individual, where there is no legal distinction between the owner and the business entity.

Co-Operative

An organization owned and operated for the benefit of those using its services, with members sharing control according to democratic principles.