One Reason Why Firms Use Trade Credit Is That It

question 4

True/False

One reason why firms use trade credit is that it is a spontaneous source of finance.​

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Definitions:

General Ledger

A comprehensive set of accounts that records all financial transactions of a business, used to prepare financial statements.

Accounts Receivable

Funds due to a company from its clients for goods or services rendered but payment has not been received yet.

Cash Receipt

A document or electronic record acknowledging the receipt of cash from a transaction.

Voucher System

A control mechanism in accounting where vouchers are prepared as evidence for every transaction or payment.