Trade Credit Is Created When

question 69

Multiple Choice

Trade credit is created when:

• A) customers return unacceptable goods.
• B) final consumers purchase goods on credit.
• C) companies purchase goods on credit.
• D) current assets exceed current liabilities.

---

Definitions:

Nonnegotiable

Something that cannot be bought, sold, or transferred to another party, or a term or condition that is not open to discussion or modification.

Document of Title

A legal document proving a person's rights to the property or goods listed on it.

Conditional Sales Contracts

Agreements where the sale is contingent upon certain conditions, often related to the buyer's full payment to the seller.

Sale-On-Approval

A contractual arrangement where the buyer takes possession of goods with the right to return them within a specified period if they are not satisfactory.