Short-term credit, or short-term financing, is any liability that is scheduled f

Question

Short-term credit, or short-term financing, is any liability that is scheduled for repayment within one year. Among the sources of short-term funds are banks, suppliers, securities firms, and insurance companies. Their securities (or obligations) can take the form of bank loans, trade credit, commercial paper, and accruals. Some types of short-term financing are easier to obtain and manage than others. Financial managers should consider the costs of the various sources of financing as part of a business's cash management strategy. The following statement refers to a source of short-term credit. Select the best term to complete the following sentence: The credit that is created when a supplier sells goods and services on an account with extended payment terms is called Piero Assemblers Corporation is a manufacturing company. Piero's balance sheet reflects a note payable of $100,000 due in 10 months to U.S. Bank. Which type of financing does the note represent? Bank loan Commercial paper O Accrual Trade credit

Explanation / Answer

Answer to complete the sentence is trade credit.A trade credit is an agreement where a customer can purchase goods on account (without paying cash), paying the supplier at a later date.

Note payable of $ 100000 due in 10 months to US bank is bank loan.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.