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      Question

      Trade credit is a source

      of:
      A Long-term finance Correct Answer Incorrect Answer
      B Medium term finance Correct Answer Incorrect Answer
      C Spontaneous source of finance Correct Answer Incorrect Answer
      D Equity finance Correct Answer Incorrect Answer
      E None of the above. Correct Answer Incorrect Answer

      Solution

      Trade credit is considered a spontaneous source of finance as it arises automatically in the course of business operations, without requiring any specific arrangements or applications. It is a form of short-term credit that allows a buyer to defer payment for goods or services received from a supplier, typically ranging from a few days to several months.

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