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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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