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Question

Trade credit is commonly used by business organisations as a source of ___________ financing.
  1. Short-term
  2. Long-term
  3. Medium-term
  4. Both A and C

A
Long-term
B
Both A and C
C
Short-term
D
Medium-term
Solution
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Trade credit is commonly used by business organisations as a source of short-term financing. Trade credits are generally a small amount of finances that are provided by the traders to another trader or a company to ensure smooth flow of trade cycle in the supply chain.

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