Which of these is the best example of trade credit?
A. • A plumbing company decides to only accept credit cards.
B. • A potato chip factory uses electronic transfers to pay employees.
C. • A textile factory pays for a large fabric order over several months.
D. • A pretzel store wants to open a second location and needs a bank loan.
C. • A textile factory pays for a large fabric order over several months.
This is the best example of trade credit as it involves the purchase of goods or services on credit, with payment to be made at a later date. Trade credit is a common arrangement between businesses where the buyer is able to receive goods or services and pay for them after a certain period of time.