Maharashtra State BoardHSC Commerce 12th Board Exam
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Explain the following term/concept. Trade credit - Secretarial Practice

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Short Note

Explain the following term/concept.

Trade credit

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Solution

(a) Trade Credit refers to the facilities or credit extended by the manufacturer, wholesalers, and suppliers of goods to the purchaser but receives payment after the credit period from the date of purchase. Manufacturers, wholesalers, and suppliers of goods or materials are called Trade Creditors'.

(b) This practice is done by a business concern with an intention to increase its sales or turnover, generate additional business and maintain good relations with the purchasers.

Concept: Sources of Borrowed Capital - Trade Credit
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APPEARS IN

Balbharati Secretarial Practice 12th Standard HSC Maharashtra State Board
Chapter 2 Sources of Corporate Finance
Exercises | Q 2. 5. | Page 37
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