Trade credit is the credit extended by one _________ to another for the purchase of goods and services.

Retailer

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Wholesaler

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Customer

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Trader

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Solution

The correct option is D Trader
Trade credits are the credits granted to manufacturers and traders by the suppliers of raw materials. These credits are given to a trader from another trader to ensure the smooth running of trades in a business supply chain.

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Similar questions

Mention the subsidiary books in which the following transactions are recorded with reason thereof.

(i) Purchase of furniture on credit for use in a shop.

(ii) Sale of goods on credit.

(iii) Goods returned by debtors

(iv) Purchase of stock on credit.

(v) Providing for interest on capital to a proprietor.

(vi) Goods returned to creditors.

(vii) Sale of goods for cash.

Which of the following will be credited in a journal, if a business purchases goods on credit?

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