ECONOMICS
CREDIT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Trade credit is an agreement between two businesses that allows one business (customer) to purchase goods or services from another (supplier) without paying cash up front, and instead pay at a later date.
Detailed explanation-2: -Definition: When a company purchases goods on credit which needs to be paid back in a short period of time, it is known as Accounts Payable. It is treated as a liability and comes under the head ‘current liabilities’. Accounts Payable is a short-term debt payment which needs to be paid to avoid default.
Detailed explanation-3: -What is Cost of Credit? Cost of Credit is the total amount you will pay less the amount of the original mortgage value. The difference between the two includes interest and any other fees and charges. The faster and sooner you reduce your mortgage, the less interest you’ll pay.