Question

Trade credit is granted to those customers who have reasonable amount of ______.

Options

• Funds in their bank account

• Financial standing and goodwill

• Weakness

• Zero balance in their bank account

Answer 1

Trade credit is granted to those customers who have reasonable amount of financial standing and goodwill.

Explanation:

• Trade credit is extended to customers who have a good financial standing and reputation in the market.
• Suppliers trust that these customers will pay on time.
• It is not based on the customer’s current bank balance, weaknesses, or zero balance in their account.