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Questions and Answers
What are manufacturers, wholesalers, and suppliers of goods or materials collectively referred to as?
What are manufacturers, wholesalers, and suppliers of goods or materials collectively referred to as?
- Creditors
- Debenture holders
- Shareholders
- Trade creditors (correct)
Why do business firms extend credit to customers for trade purposes?
Why do business firms extend credit to customers for trade purposes?
- Due to a legal obligation
- As a form of cash loan
- To decrease their sales
- To promote future sales (correct)
What is the main difference between shares and debentures?
What is the main difference between shares and debentures?
- Shares are issued by governments, debentures by private companies
- Shares represent ownership, debentures represent a loan (correct)
- Shares are debt instruments, debentures are ownership securities
- Shares are short-term, debentures are long-term securities
In trade credit, what happens when goods are delivered by a supplier to a customer?
In trade credit, what happens when goods are delivered by a supplier to a customer?
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Why do suppliers often offer discounts for early bill payments under trade credit?
Why do suppliers often offer discounts for early bill payments under trade credit?
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